another - how much SA pension question
another - how much SA pension question
Author
Discussion

coetzeeh

Original Poster:

2,879 posts

260 months

Thursday 19th January 2023
quotequote all
Please help answer the riddle for a friend.

PAYE and expecting to have a shortfall in tax deducted for the current year of circa £7k (2022/23).

£40k pension allowance used this year but may have some headroom in prior years.
After utilizing annual allowance in current year expecting taxable income to be ~£125k.

So thinking of making a one off payment into pension fund to off set the expected £7k tax bill.
Is the thinking correct?
Assume prior years tax rate at 40%.
What amount of one off payment would be required?

Much appreciated.

Rufus Stone

12,287 posts

80 months

Friday 20th January 2023
quotequote all
£20,000 assuming payment via relief at source.

But how has the shortfall in tax arisen under PAYE?

coetzeeh

Original Poster:

2,879 posts

260 months

Friday 20th January 2023
quotequote all
Rufus Stone said:
£20,000 assuming payment via relief at source.

But how has the shortfall in tax arisen under PAYE?
One off incremental equity tranche maturing at the end of tax year meant breaching higher tax thresholds.