Picked up a tax return client recently and although the sources of income are the usual, the numbers are a bit larger then normal. I was hoping someone might confirm my thinking re: the pension savings charge.
Client has net employment income of c,£600K and has paid £40,968 net into a registered occupational pension scheme. The basic rate band will be extended by the £51,210 gross contribution. The annual contribution allowance will taper down to £10K based on earnings.
So the charge on the pension savings will be £13,935 ((net contribution £40,968 less £10K allowance) x 45%) less £10,241 basic rate tax treated as paid, £3,694?
Any input much appreciated. Thanks in advance.