Taxable Earnings for Pension Contributions

Taxable Earnings for Pension Contributions

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Sorry - probably a daft question - but can't find any clear guidance on HMRC web-site - and I think the answer is no - but I'm sure someone cleverer than me out there can confirm.... does interest earned by a self employed individual count towards the calculation of taxable earnings for pension contributions??

Thanks.
Sue Hill

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By stephenkendrew
09th Nov 2007 06:35

No
look here:-

http://www.hmrc.gov.uk/manuals/rpsmmanual/rpsm05101120.htm

You will see the maximum is based on "relevant UK earnings". The glossary at RPSM20000000 defines relevant UK earnings as:-

employment income,

income which is chargeable under Schedule D and is immediately derived from the carrying on or exercise of a trade, profession or vocation (whether individually or as a partner acting personally in a partnership), and

income to which section 529 of Income and Corporation Taxes Act 1988 (ICTA) (patent income of an individual in respect of inventions) applies.
Relevant UK earnings are to be treated as not being chargeable to income tax if, in accordance with arrangements having effect by virtue of section 788 of ICTA (double taxation agreements), they are not taxable in the United Kingdom.

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DougScott
By Dougscott
09th Nov 2007 07:26

Excellent
Now that's what I call an excellent, informative, evidenced and comprehensive answer! We should have more answers like this on Accounting Web.

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By sue.hill
11th Nov 2007 11:16

Thanks very much.
Sue.

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