60% Tax, Car Allowance & Pension

[Meltham Terrier]

I know that this is a common topic , but I haven't found the answer that I looking for.

So I have a New job and start in a few months but I need a bit of Guidance.

So my new role will see me on a basic of £110k pa with a company car which was all good, with a potential bonus of 30%

My plan was to pay £10k into my pension via PAYE to get me to £100K and under the 60% threshold.


However the company wants to now give a car allowance of £10k pa instead of the car so salary would be effectively £120k pa,

All there other employees are on a allowance system

If I still pay £10k into the pension the additional £10k car allowance ends up at £3600 pa net which is not going to buy or run a car.

I could put £20k into the pension and my take home salary would be unchanged , but I will need to buy a car.

The issue is that there is NO Salary Sacrifice on offer with the new company.

The other issue is the annual milage of the car which would be 30k pa so leasing or PCP costs for a mid range car is £1000 pm.

Is the £40k pension allowance combined between my contributions and the company or just mine?

I know that these are very much 1st world issues and I'm in a very fortunate position, but I would just like to see the possible options

many thanks Andrew

[alscar]

Congrats on the job.
Not sure if relevant or indeed if it helps but my car allowance when paid was stated as being non pensionable so my nett on it as such was nett of top rate tax at the time.

[theboss]

the £40k annual allowance applies to employer and personal contributions combined.

[Gargamel]

Meltham Terrier said:

I know that this is a common topic , but I haven't found the answer that I looking for.

So I have a New job and start in a few months but I need a bit of Guidance.

So my new role will see me on a basic of £110k pa with a company car which was all good, with a potential bonus of 30%

My plan was to pay £10k into my pension via PAYE to get me to £100K and under the 60% threshold.


However the company wants to now give a car allowance of £10k pa instead of the car so salary would be effectively £120k pa,

All there other employees are on a allowance system

If I still pay £10k into the pension the additional £10k car allowance ends up at £3600 pa net which is not going to buy or run a car.

I could put £20k into the pension and my take home salary would be unchanged , but I will need to buy a car.

The issue is that there is NO Salary Sacrifice on offer with the new company.

The other issue is the annual milage of the car which would be 30k pa so leasing or PCP costs for a mid range car is £1000 pm.

Is the £40k pension allowance combined between my contributions and the company or just mine?

I know that these are very much 1st world issues and I'm in a very fortunate position, but I would just like to see the possible options

many thanks Andrew

Hi,

There is no actual limit on pension contribution by you, you can put it all in. Its the tax relief you get that is capped at 40k

Its a combined figure, doesn't matter who puts it in, you or the company

If you didn't put 40k in the last three years, you can carry the balance fwd - so if you only put in 25k in each of the three previous years, you could have another 45k available on which you'd pay no income tax.

https://www.gov.uk/tax-on-your-private-pension/ann...

Good info the Gov site

[Meltham Terrier]

theboss said:

the £40k annual allowance applies to employer and personal contributions combined.

Thank you

[Meltham Terrier]

Gargamel said:

Hi,

There is no actual limit on pension contribution by you, you can put it all in. Its the tax relief you get that is capped at 40k

Its a combined figure, doesn't matter who puts it in, you or the company

If you didn't put 40k in the last three years, you can carry the balance fwd - so if you only put in 25k in each of the three previous years, you could have another 45k available on which you'd pay no income tax.

https://www.gov.uk/tax-on-your-private-pension/ann...

Good info the Gov site

Thanks