Paul Phillis & Co Limited

Chartered Accountants

Contact us

11a Corelli Street

Newport NP19 7AR

01633 267372


March 2014

Another end of tax year is fast approaching so it's time to review your personal tax affairs. One point to consider is the effect of the withdrawal of personal allowances for higher earners.

As you will no doubt be aware, individuals start to lose their personal allowance when their income reaches £100,000.  It is reduced by £1 for every £2 of income over £100k until it is totally diminished at incomes of £118,880 or over.  This results in an effective tax rate of 60% for incomes in this band.

One way to mitigate this level of tax is to make a contribution into your personal pension pot as this will reduce your relevant income.

Tax planning

“Potential 60% tax relief for pension contributions”

Worked example

The £15,104 pension contribution receives further additional basic rate tax relief so a total of £18,880 is paid into your pension pot.

Total gross payment to pension pot: £18,880

Reduction in Net take home pay:      £7,552

Saving:                                         £11,328

To be able to include a pension contribution as a deduction against your income, the pension company must receive your pension contribution, i.e. funds cleared, by 5th April 2014.

Alternatively, the same relief can be gained via a salary sacrifice arrangement with an employer so this could be considered as part of you 2024/2015 tax planning.

As always, we are happy to help advise on these changes or explain them and relevant planning opportunities in further detail. If you are an existing client please speak to your regular contact.

We work very closely with two Independent Financial Advisors who can provide specific pension planning advice.  Please let us know if you would like their contact details.

If you are not a client and would like to arrange a free, non-obligation consultation on this or any other matter you feel that we may assist you on please call us on 01633 290745 or complete our contact form to arrange a visit.  To receive these newsletters direct to your inbox, please sign-up to our mailing list.


Without pension

With pension




Net pension payment



Income tax payable



Take home salary



Posted by: Lucy Thomas, 17 March 2014