How to work out pension contributions to keep below 40%

[audi321]

Hi all, I normally complete my Self Assessment on the HMRC website, but obviously this is after the 6th April and therefore is too late for a lump sum pension contribution for the previous year.

Now I could work it out manually but I have complexities this year with regards to mortgage interest relief on buy to lets (transitional period), so I wondered if there's any software which can 'predict' the tax due (before) the end of the current year so I know what lump sum pension contribution I need to make to maximise the 40% relief?

Thanks in advance guys.

Edited by audi321 on Saturday 22 September 15:05

[Mr Pointy]

audi321 said:

Hi all, I normally complete my Self Assessment on the HMRC website, but obviously this is after the 6th April and therefore is too late for a lump sum pension contribution for the previous year.

Is that correct? I'm fairly sure I claimed for unused allowance from previous years.

[Testaburger]

I believe you can claim back allowances for the previous three years.

[PurpleMoonlight]

You can carry forward unused allowances to the current year, but you only get tax relief in the tax year of actual payment.

[Fore Left]

I called them when I realised I hadn't been claiming the full 40% relief. They refunded me the difference for the last 4 or 5 years (can't remember exactly) which was nice

[ellroy]

You need to use this years allowance, before using the previous three, starting with the earliest first. So it’s a little bit complex Paul. Especially if you’ve got some other transitional stuff to work through in the current year.

Pay your accountant you tight git!

[audi321]

Ha ha cheers for the advice matey.

As previously said though, you’re talking about allowances, I’m taking tax relief. I don’t want to mess around carrying back/forward. I want it clean and make the contribution in the current tax year.

Seems I’ll either have to work it out manually or employ an accountant. You know I’m tight! Lol

[ringram]

I used to do an estimate and pay down to 40% margin. If I had spare savings I overestimated. 20% credit is still better than zero! So err on the excess side if you are worried.

Worked fine for me.

[oyster]

A simple spreadsheet with a few calculations in it will do the trick OP.