Pension carry forward + salsac

[ChiefWiggum]

Happily 2017-18 looks like being an unusually lucrative year for me (employer's share price has done well) but of course HMRC wants in big time

Clearly pension contributions are a good way to keep my hands on some of the loot. Pension tax relief for high earners seems doomed to take a kicking whoever is in government; ideally I'd prefer to keep the cash in-hand (hoping to move house next year) but seems smart to use the allowances before they are further reduced. Fortunately, I have plenty of annual allowance from 2014-17 available to carry forward. However, to confuse matters my employer operates pension contributions via Salary Sacrifice...and there's relief taper to worry about too. Anyone here experienced this fun mix!?

- I assume the best approach is simply: load up pension, and then at the end of the year declare carry forward via self assessment. Even with some of this year's allowance tapered away, the addition of carry forward will take me comfortably where I need to be. Everything sorted!?

- To do this, I could send my pension provider a cheque, but believe I am also able to crank up my salary sacrifice %age which I believe is more efficient (NI uplift, also no need to claim tax refund) Any other factors here?

- Isn't the definition of "threshold income" a bit odd? If I understand it correctly, making big enough pension contributions can reduce your threshold income below the magic £110k barrier and *boom* taper disappears and you have your relief back. But taper is intended precisely to reduce relief for high earners making large contributions! Obviously there's something I don't get about it...?

[LeoSayer]

ChiefWiggum said:

- Isn't the definition of "threshold income" a bit odd? If I understand it correctly, making big enough pension contributions can reduce your threshold income below the magic £110k barrier and *boom* taper disappears and you have your relief back. But taper is intended precisely to reduce relief for high earners making large contributions! Obviously there's something I don't get about it...?

The £110k threshold includes salary sacrifice.

ChiefWiggum said:

- I assume the best approach is simply: load up pension, and then at the end of the year declare carry forward via self assessment. Even with some of this year's allowance tapered away, the addition of carry forward will take me comfortably where I need to be. Everything sorted!?

- To do this, I could send my pension provider a cheque, but believe I am also able to crank up my salary sacrifice %age which I believe is more efficient (NI uplift, also no need to claim tax refund) Any other factors here?

Salary sacrifice avoids NI and some employers might refund the employer NI they save as well. As a higher earner you will probably find it more efficient for NI to sacrifice 100% of your salary for 3 months instead of 25% of your salary for 12 months.