Pension & Payments on Account question?

[mlc2009]

Hi All,


Two things to clear up, my accounts are very simple. However, I would like to be crystal on 2 things

I'm an additional rate tax payer, Last year paid 40k into a SIPP and they topped it upto 50k. Do I put 50k on my self assessment or 40k? Also, as I pay 50pc tax, do the HMRC pay me extra for this?

On reducing payments on account, If I want to reduce both payments on account by 10k, do I insert 10k on the reduce payments page or 20k?

 

[kevin.doran]

Re PoA you enter the figure you would like each payment reduced TO, not by.

 

[Mitchells Bristol]

You need to declare the pension contribution gross (i.e. £50k). This has the effect of extending your basic rate band on which you pay 20% tax, so in turn will reduce the amount you pay at 40% and/or 50%. ergo, you will save tax at your marginal rate

 

[mlc2009]

Ok I Submitted my tax return and on my calculation, it still hasn't taken last years payments into account ( 22k in total ) into calculation, any idea what i do?

 

[mlc2009]

I won't be able to pay my tax bill until tomorrow, and when I ring them to explain they say they cant deal with call at the moment, goodbye! Shall I just leave it and pay them tomorrow?

 

[Jenni384]

The payments on account should 'come out in the wash.' Just call them tomorrow and pay. Worst case you will have to pay 1 day's worth of interest

 

[mlc2009]

I finally paid it

I was under impression that %50 tax payers get some sort of rebate if they contribute to pension? I might of been wrong

 

[Jenni384]

Both personal pension payments and gift aid donations have the effect of extending the basic rate tax band, i.e. it means the 40% band kicks in later.

I'm not aware of any further provisions re the 50% band offhand.