Tax free childcare - accountant advice please!

[Circleofapples]

NC - looking for advice please.

I have a salary of £75,000 and get shares from my company. This year my shares were worth £25,400 on the day they vested. I paid tax (50%) on those shares the day they vested, so had £12,500 worth of shares at the end of that day. Those shares have taken a huge dive and are worth about £4000. However, technically, because on the day they vested they were worth £25,400, that is what the HMRC have added to my salary and I’ve been put down as a high rate earner with a salary of £100,400pa.

Because I’m £400 over £100k, I am going to lose my tax free childcare for the kids. My eldest currently gets 30 free hours per week and my youngest gets 20% tax break. The combined benefit of this is about £12k per year.

I mentioned this to the woman at the HMRC and she told me to up my pension contributions, but then said she “couldn’t say any more” about it.

Can anyone advise me of what can be done to get below the threshold again? I literally am close to just asking for my salary to be reduced because I can’t afford the extra childcare costs of £1000 a month.

Thanks so much in advance.

P.S I’m in London, so appreciate this salary might seem high but it’s actually really tight to pay the mortgage, bills and two nursery bills on this. Thanks for being understanding.

Pension contributions have to be paid over in the year to count, so don't hang around given that it is February.

Yes, get your extra pension request in time for feb payroll if you can. Do you just get £75k basic, no bonus/commission?

Thanks both. Do you mind spelling it out a bit more for me? Sorry to be such a moron. Should I literally get all of Feb’s pay out into my pension?

My basic was £69k with a £6k bonus paid back in July as part of a golden handshake (paid at the start of my second year of employment).

Do you not pay into a pension at the moment? If you do then you may already be below the £100k threshold.

£500 would be enough you don't need to lose your whole February pay. Maybe £1k just to be safe.

Yes, I have always paid 4.5% into my pension and about 3 months ago I increased it to 7.5%, so I get a total of 12% from me & employer combined.

It’s your adjusted net income that counts - you may already be under £100k if you pay into a pension www.gov.uk/guidance/adjusted-net-income

Thank you all so much. I really appreciate you taking the time to respond.