P60's, Pension contributions and child benefit thresholds
Posted: January 10th, 2017, 10:21 pm
Hi
A "Voluntary" Redundancy package this year has thrust me in to not only the 40% tax category for the year but even in to the position of potentially losing all our child benefit payment for this year. First world problems I realise.
Up until now I've used AVC contributions to (mostly) keep just within the 20% threshold via salary sacrifice, so my p60 has always shown a gross that is well below any figure that might threaten child benefits.
This year I plan to put a significant lump sum in to a SIPP imminently, such that my "taxable" figure is again just within the 20% tax threshold and therefore well below the child benefit threshold. In future years I also plan to use SIPP contributions (which won't be direct from payroll) to keep my 40% tax exposure minimised. Unfortunately salary sacrifice is no longer an option and the AVC's that my new employer will allow me to pay in to from payroll are less than inspiring, so payment via payroll won't happen.
I understand that paying in to a SIPP directly from my bank account (rather than via payroll) will engender the annual joy of tax forms. I'm hoping someone can reassure me that a P60 showing a rather hefty income, even if a significant amount ended up in a SIPP, won't preclude me from possible child benefit access. Is that the case?
Thanks
Bob
A "Voluntary" Redundancy package this year has thrust me in to not only the 40% tax category for the year but even in to the position of potentially losing all our child benefit payment for this year. First world problems I realise.
Up until now I've used AVC contributions to (mostly) keep just within the 20% threshold via salary sacrifice, so my p60 has always shown a gross that is well below any figure that might threaten child benefits.
This year I plan to put a significant lump sum in to a SIPP imminently, such that my "taxable" figure is again just within the 20% tax threshold and therefore well below the child benefit threshold. In future years I also plan to use SIPP contributions (which won't be direct from payroll) to keep my 40% tax exposure minimised. Unfortunately salary sacrifice is no longer an option and the AVC's that my new employer will allow me to pay in to from payroll are less than inspiring, so payment via payroll won't happen.
I understand that paying in to a SIPP directly from my bank account (rather than via payroll) will engender the annual joy of tax forms. I'm hoping someone can reassure me that a P60 showing a rather hefty income, even if a significant amount ended up in a SIPP, won't preclude me from possible child benefit access. Is that the case?
Thanks
Bob