(Before anyone says speak to your accountant, this is for my self-assessment, not for my PSC, and I do my own personal finances)
(Before anyway says speak to an accountant anyway, then please move on - that is what the internet is for)
I'm looking at my 2018-19 self-assessment and trying to work out what Dividend I paid myself (sorry, could have paid myself
) on March 31st 2019, so as to maximise the Dividend amount but limit the tax due to the 7.5% rate.
In January 2019, I paid (from personal funds) the max amount I could into my Personal Pension based on my earned income. This was £11,850 gross, matching my salary for that tax year. I paid £9,480 (net amount) from my personal bank account and my pension provider topped it up with the tax relief.
The question is, in my self assessment tax return, there is the field that asks for:
"Payments to registered pension schemes (Also known as PPR) where basic tax relief will be claimed by your pension provider (called Relief at source). Enter the payments and basic tax rate"
The help page for that field is here: HMRC: Help
When I enter the gross £11,850 amount here, and amend the rest of my return, it effectively means I can (sorry, could have
) paid myself and additional £11,850 in dividends for the 2019-2020 tax year at the 7.5% tax rate.
Is that right? I think it is, but have this niggling doubt since the £11,850 already contains the 20% tax relief credit?
Adding the pension amount also adds this commentary to the "Full Calculation" page on the tax return
Am I missing something here?
(Before anyway says speak to an accountant anyway, then please move on - that is what the internet is for)
I'm looking at my 2018-19 self-assessment and trying to work out what Dividend I paid myself (sorry, could have paid myself
![Smile](https://forums.contractoruk.com/core/images/smilies/smile.png)
In January 2019, I paid (from personal funds) the max amount I could into my Personal Pension based on my earned income. This was £11,850 gross, matching my salary for that tax year. I paid £9,480 (net amount) from my personal bank account and my pension provider topped it up with the tax relief.
The question is, in my self assessment tax return, there is the field that asks for:
"Payments to registered pension schemes (Also known as PPR) where basic tax relief will be claimed by your pension provider (called Relief at source). Enter the payments and basic tax rate"
The help page for that field is here: HMRC: Help
When I enter the gross £11,850 amount here, and amend the rest of my return, it effectively means I can (sorry, could have
![Smile](https://forums.contractoruk.com/core/images/smilies/smile.png)
Is that right? I think it is, but have this niggling doubt since the £11,850 already contains the 20% tax relief credit?
Adding the pension amount also adds this commentary to the "Full Calculation" page on the tax return
Your pension payments of £11,850.00 have increased your basic rate limit.
Your basic rate limit for income not subject to rates has also been increased.
This ensures you receive additional relief on your contributions at your highest marginal rate of tax.
Your basic rate limit for income not subject to rates has also been increased.
This ensures you receive additional relief on your contributions at your highest marginal rate of tax.
Comment