Tax credit question.......

[CarGirl]

I noticed when I filled in my final declaration last year that you can deduct gift aid payments to reduce your income for the year.

What I can't remember is what figure off your P60 is it that you use. Is it your taxable salary or your gross salary.

We make compulsary pension contributions that are not taxable - so is it with or without those payments

They ask me for my gross salary and then go on to ask for anything else, benefits in kind, tips etc. I'm pretty sure you'd have to give the gross. Paying into your pention is for your future benefit and is of tax benefit. You can't expect a top up on your WTC just so you can pay into your pension I'm afraid. I would love to be able to pay into a pension

That's fine just wanted to check.

It's all wonderful to pay all this money into a pension but I assume when dh and I are both working between the ages of 60 & 70 we will have to continue to pay in despite having reached the maximum number of years contribution. Oh and by the time dh retires at 70 I'll be 75 and who knows we will probably have very little retirement left..........

Not to mention the sh*t wages we get!

Rant over

CTC is definitely net of pension contributions, presumably WTC is on the same form and so is the same figure.

Really - where does it say that on the tax credit site as I looked and looked and then just started on the bailey's out of frustration

see here

that is a link to the Revenue Manuals on the subjecti
It definitely is, I looked into it a year or so ago when making my claim - and discussed it with someone on the helpline.

cheers squirrel I will give them a ring in the morning to update our figures. Then I'll have the joy of rining again in April to update for the year 2011/12. Went back to work in Sept so will have a much higher income next year and this years will be higher than I thought in Sept as I've got a temp promotion!

Back to the spreadsheet.

I wonder how many other people know about the charitable contribution deductions - I had forgotten it was the grossed up amount

I wonder how many people know about the pension - particularly if you pay directly rather than as a deduction from salary (and it is the grossed up contribution in that case, not the amount you pay).

In a lot of cases it might well be worthwhile starting (or increasing) pension contributions when the limits start changing, or if you are marginal for child benefit purposes (where pension contributions can take you out of the higher rate tax regime).

So I pay directly so it's the amount deducted?

I worked for a few years part time and then had a career break so I'm tempted to increase my pension contributions but I guess we don't have much faith that in 30 years time we'll get the return we have been told we will get IYSWIM?

Another question - what is the rate of tax on charity contributions currently? Someone said something about it changing?

yes the amount deducted - you will use the "taxable pay" on your P60.

Agree on the "is it worthwhile", but in some cases (particularly marginal cases on child benefit) the child benefit not lost by making the contributions will be less than the pension contribution made - in which case it is a no brainer, you get more cash in your pocket and a contribution into your pension.

The tax back on your gift aid will be at your marginal rate of tax, so it depends if you are a 20%, 40% or 50% tax payer.

Sadly only a basic rate tax payer, we are poorly paid civil servants despite what joe public seems to think! If we had commuting cost and not get flexi time we couldn't afford to work there

actually, I'm not sure if that is what you are asking.
The gross contribution will be at 20% - so a £100 contribution will be £125 gross.
If you are then a 40%/50% tax payer you can claim the additional tax back.

well I was guessing you weren't 50% if you were claiming tax credits :)

I need to ring up this week - got my promotion in Dec but was waiting to have a normal month to try and work out what I'll earn for the entire year. Not to mention the trauma of having to get through on the phone!

Not sure we'll even make the 40% with salaries combined

Oh and if I finish my accountancy qualifications I don't even get a pay rise

that's crap - but presumably you then become more employable outside? What qualification are you doing?

I was doing ACCA but on return from career break they wouldn't help me find a post AT ALL told me I couldn't return due to recruitment freeze (wrongly!!!) so I don't have a finance post so I can't do anymore until I get a suitable post again. Had to return on a lower grade just to get back through the door.

It's ridiculous, it's all down to how good your individual manager is. This is the problem of not being able to reward good/excellent work financially though isn't it.

Can't work out a solution to it though but they end up carrying people who are rubbish and can't keep staff that are fantastic