Originally Posted by
maxdiscretion
What is the collective wisdom to avoid the tax trap?
Must admit it’s snuck up on me this year, first time earning £100K+.
Is it as simple as thus:
Earn £110K Gross…
…Overpay pension by £10,100, “taxable income” becomes £99,900.
Fill in a tax return to be relieved circa £6K in income tax?
Therefore disposable cash reduced in theory by approx £4K, but my pension has £10K extra and I’ve given considerably less to HMRC…?
Basically yes, or if your pension contributions are salary sacrifice (ie before tax) then your gross becomes lower in the first place