Marriage Allowance & 40% tax

[sjt85]

Afternoon all,

Long time lurker/rubbish contributor - sorry!

I'm due to start a new job (on PAYE to another PAYE for a c30% pay rise) in January and have done a forecast of my taxable earnings for 2018-19 (i.e. after "at source" pension deductions) and have come up with a figure of £47,860.

My wife stays at home and raises our two small children ,so I've taken the 10% marriage allowance. However my earnings above means i'd no longer be eligible for this allowance and as such would face a tax bill at the end of 2018/19

If I were to pay in £1,511 before April 2019 into a SIPP and did a self assessment return, declaring taxable income of £46,349, would this exempt me from any clawback of my marriage allowance? I'd then cancel my marriage allowance for 18-19 as earnings would be well above and also means repaying child benefits in full.

It is that simple isn't it? I feel like I'm missing something...

Thanks in advance for any clarification.

Edited by sjt85 on Thursday 4th October 16:44

[theboss]

I think you're getting your tax years confused. Your liability for 2017-18 would only be affected by SIPP contributions made in the same time period i.e. until April 2018. If you make a contribution now, it will reduce your liability for 2018-19.

[sjt85]

theboss said:

I think you're getting your tax years confused. Your liability for 2017-18 would only be affected by SIPP contributions made in the same time period i.e. until April 2018. If you make a contribution now, it will reduce your liability for 2018-19.

My fault, meant forecast for 2018-19 - sorry! Original post edited...

[theboss]

I don’t know anything about the married couples allowance but in any case depending on where your income levels off, it may well be worth making any SIPP contribution because the marginal rate of tax relief is very high between £50-60k due to having to repay child benefit. I know when I had three kids and child benefit in a former life, so to speak, it was about 65% relief in this particular income band.