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…?
You're doing something seriously wrong if your pension only benefits £10K when you put £10K into it. You should be claiming tax relief so with employer's NI contribution refund added your £10K becomes more like £15K.
No-one should be missing the opportunity to get the government to add up to 50% to their savings!