Pension contributions & child benefit

[bigbaggyeyes]

This year I'll have to do a self assessment, as I'm over the threshold for earnings in relation to child benefit. I pay a pension through my employer but my main pension contributions are through a private pension and are taken out of my bank account after I've been paid (so after tax). If I take these into consideration I'm under the tax threshold.

Does anyone know if I can take both my company pension and private pension contributions into consideration regarding tax and child benefit?

Yes you can do as long as you don't exceed the annual allowance of £40k. For your personal plan, this is the contributions you actually make once grossed up with tax relief. For your company pensions it can be more complex depending on whether it is a final salary scheme etc and also what the employer contributions are. The scheme booklet will advise but as long as you lay enough to keep you under the threshold for higher tax you will keep child benefit. This is what I have done and fortunately making some very large contributions but in effect with keeping child benefit and not paying tax, for the first £10k I'm getting tax relief at 60% as have two kids!!

Thank you @MarieG10 that's exactly where I'm at now.

One more daft question, I presume even though you are under the threshold to pay additional tax, due to pension contributions, you still have to fill in a self assessment?

Up to £10k, HMRC will just apply it to your tax code. Over that they want you to reclaim the additional 20% tax relief via self assessment. I'm just challenging them over this part.

So unless you exceed £10k you shouldn't need to do self assessment. However, I would strongly advise you to. The reason is that if HMRC make an error or some information isn't taken account of, then they will back charge and reclaim tax from you. If you complete a self assessment and it is correct, you have fully declared and it moves the responsibility to them (I speak from bitter experience).

I therefore now complete a self assessment despite being told I don't need to (when in fact I do as I make pension contributions over £10k