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What is a band level?

Can I reduce my tax band from 40% back to the 22% level by increasing my pension contributions.?

  • If my earnings were just over the 40% tax band lower level, could I increase my pension payments to bring me back down below it and only pay the 22%? How much would be needed per 1K and at what rate would the tax relief on those payments be?

  • Answer:

    Cei; Which amounts to the same thing.

steve c at Yahoo! Answers Visit the source

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Short answer - No You will still be taxed at 40% as your total earnings are over the threshold. However youl would get 40% tax relief on the cfontibutions.

Cei

So long as you are not already putting the maximum possible into your pension plan - yes. If you put the extra 1,000 in you will get tax relief at 40% on it, whilst the eventual pension will only be taxed at whatever the rate is when you draw it. If you are not resident in the UK an annuity or pension will normally remain taxable in the UK.

David H

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