Interesting tax avoidance strategy?

Interesting tax avoidance strategy?

Author
Discussion

oyster

Original Poster:

12,577 posts

247 months

Monday 30th March 2015
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By using pension AVCs or pension salary sacrifice, we know that one can reduce one's 'effective' salary to a lower level to take advantage of lower tax rates, child benefit etc.

But can it also be used more extremely to earn working and child tax credits?


Let's say I made enough of a pension salary sacrifice so that my effective salary was only £15k, could I claim the benefits?


I'm seeing the problem as being the need to have the earnings assessment based on the previous year. Not sure if child tax credits and working tax credits can be claimed retrospectively via a self assessment tax return.

C0ffin D0dger

3,440 posts

144 months

Monday 30th March 2015
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I guess you could but would what you'd actually gain from benefits make up the shortfall between your £15k a year and actual take home pay before putting this crazy scheme into place? wink You'd have a massive pension at the end of it mind assuming you make it to retirement age which is always a bit of a gamble.