Atif Irshad @brilliantguy29 - Twitter Profile

about 1 year ago

⚠️Lots of threads/posts on tapering, threshold, adjusted etc. Now we have March payslips can I tell you how I would approach it 1️⃣ Get your March 25 payslip. Note your YEAR TO DATE TAXABLE Pay. *IGNORE* gross pay and for now IGNORE pensionable pay. Dont use gross income and deduct pension contributions - the "taxable pay" already has them deducted so dont deduct it again. 2️⃣Do *NOT* add back in salary sacrifice for things likes cars and childcare. You are required to add in "relevant salary sacrifice arrangements made after 8 July 2015" - the key word here is relevant defined as "the individual gives up the right to receive general earnings or specific employment income in return for the making of relevant pension provision," - so DONT add cars etc back in. 3️⃣So you now have your NHS taxable income for the year. Now you need to add any other taxable income - think other PAYE, private practice, property, BIK, dividends, interest etc. Basically anything else that is subject to income tax. Less employment related Income Tax Reliefs claimed via tax return i.e. GMC, BMA, MDU etc 4️⃣Do NOT take off gift aid for normal charitable donations which is another common mistake Ive seen experts make. Note you can do this for the ridiculous £100k cliff calculation, but not threshold/adjusted 5️⃣So your NHS taxable income plus all other taxable income, less any other NON NHS pension contributions i.e. a SIPP, is THRESHOLD INCOME. If this is below £200k you are not tapered and have the full £60k allowance and any carry forward (use the HMRC carry forward calculator to work out if you have carry forward - you will have needed both your RPSS to the 22/23 tax year and 23/24 PSS to work this out, latter obviously also delayed in England & Wales - you can estimate 23/24 using the tool below). 6️⃣If threshold income above £200k you need to work out ADJUSTED INCOME. You wont find out your PIAs for 24/25 until October 2025 but can estimate them using the link to the free tool and video below. If you are in 2008 its a bit more involved, and I wouldnt advise the NHS Employers modeller for this as for 2008 it ignores reckonable pay so is wildly innacurate. Adjusted income is THRESHOLD plus deemed PIA pension growth accross both schemes plus any other pension growth or SIPP contributions etc. The free tool below will help you calculate this. 7️⃣The free tool below will help you estimate your threshold and adjusted income, so see if you can expect a liability for 24/25 (due Jan 26, scheme pays Jul 26) WHY IS THIS SO IMPORTANT in 24/25 Because of the 23/24 pay award paid in 24/25 and DDRB 24/25 many people will have VERY LARGE PIAs - Im year 14 (just) and my PIA is over £150k. That means if you go over THRESHOLD income, when you add in the PIA, tapering can be BRUTAL and reduce your allowance from £60k down to £10k - that might increase your AA tax charge by £22,500 (45% x £50k reduction). So if your THRESHOLD income is CLOSE to £200k you can still DURING THE TAX YEAR ONLY i.e. the next 9 days or so make a SIPP payment to reduce it below threshold income to avoid tapering. Say your THRESHOLD income (step 5 above) is £210k you could make a £11k GROSS SIPP payment which would reduce your threshold income to £199k which could reduce your AA liability by £22.5k making the SIPP free. See the worked examples in the video below Free tool and video to work all this out is below Free Tool: https://t.co/rVC2FzNF84 Self help video: https://t.co/UB9dqIyke5

9

73

22

173

35K

Atif Irshad

@brilliantguy29

Who to follow

Last Seen Users on Sotwe

Trends for you

Most Popular Users