perm pension rules

[hgllgh]

I am considering a leaving contracting for a well paid permie role.

I asked the pimp if I can maximise the personal pension contribution to avoid paying the 40% on a large chunk of money. He doesn't know. Is this possible and how does it work? Do I have to declare up front what my pension contribution for the tax year will be to March, pay the 40% tax, and then claim it back through the self assessment in the following October ? Is completely flexible how much I could claim back or does the company have to agree it first?

[Maslins]

Who's the pimp?!

Unsure exactly what you're talking about. If you take on a high paid PAYE role now-ish, then not much of it will be earned this tax year, so when looking at your personal tax position I'd have thought salary/dividends from contracting to date would be far more significant.

If you're talking about next year onwards, then my first thought would be have a chat with the employer about what pension scheme they have in place. If you can get it done via the payroll it'll be simpler for you. If not, then (I'm not an IFA but) I'd think it'd be a case of suffering hefty tax on your salary, putting a large chunk of your net pay into a personal pension scheme, then making a reclaim via your personal tax return.

[BlasterBates]

You probably need to see an accountant, but my understanding is you don't need agreement from your employer, but you will probably need to claim tax relief, i.e. it won't happen automatically.

[Jessica@WhiteFieldTax]

You probably need to see an accountant, but my understanding is you don't need agreement from your employer, but you will probably need to claim tax relief, i.e. it won't happen automatically.

Concur

[Forbes Young]

I am considering a leaving contracting for a well paid permie role.

I asked the pimp if I can maximise the personal pension contribution to avoid paying the 40% on a large chunk of money. He doesn't know. Is this possible and how does it work? Do I have to declare up front what my pension contribution for the tax year will be to March, pay the 40% tax, and then claim it back through the self assessment in the following October ? Is completely flexible how much I could claim back or does the company have to agree it first?

I would advise you speak to a financial adviser who can look at your overall specific position with regards to income from various sources, what you have set up already etc and then give you appropriate advice. There are restrictions on contributions you can make each tax year into a personal pension scheme as well as company schemes. If you don't have an IFA, I recommend Philip Lee of Hanson Wealth 07711 767452

Graeme Bennett ACMA MBA

[hgllgh]

You can contribute all of your 40% tax into your pension. 20% can be paid direct into the pension and claimed on your behalf be the pension provider. the other 20% you have to claim on your self assessment.