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Pension and tax return - idiot's guide please!
6

FlippyNeck · 28/06/2018 22:54

If I've made contributions to a personal pension, do I take those contributions off my net profit when I complete my online tax return? Not sure how it all works and I'd really appreciate an explanation. Do pension contributions reduce my net income and therefore my tax liability? TIA.

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delilahbucket · 29/06/2018 08:19

There is a separate section on your tax return for pension contributions. It does reduce your tax liability, but it depends whether the pension company claims that relief on your behalf (mine does).

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FlippyNeck · 30/06/2018 08:38

Thanks delilah

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Ta1kinPeace · 08/07/2018 20:47

sole trader contributions to a personal pension are NOT tax deductible

there may be extra tax relief if you are in the 40% band

but they are NOT an allowable cost

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zoebeels · 08/08/2018 11:36

Hey! loads of good advice here: getcoconut.com/2016/12/sole-trader-pensions-will-you-be-ready-for-a-life-free-of-work/

I would also sign up for Multiply: bit.ly/2OlbY4N - they're not live yet but it's a free app that gives you a plan for your money, including pensions!

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PolkerrisBeach · 09/08/2018 08:00

They're not tax deductible, but there is a section on the tax return where you have to declare any pension contributions you've made.

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pacer142 · 09/08/2018 09:45

They're not tax deductible, but there is a section on the tax return where you have to declare any pension contributions you've made.

As stated earlier, it depends on the type of scheme and type of payments. There is usually tax relief for higher rate taxpayers, but again, depends on the scheme/payment type. Likewise, there are schemes were tax relief is indeed given through the tax return even for basic rate taxpayers. There are different boxes on the tax return for different types of payments/scheme.

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