Advent Day 22 – 80% Pension Saving for additional rate tax payer Example

Pension contribution – £1,000 cash paid but 25% tax credit in pension fund – £1,250

Tax saving from base rate extension £1,250 x 25% = £312.50

Net Cash from client after tax refund = £1,000 – £312.50 = £687.50

Therefore £687.50 out for £1,250 in your pension fund is a gain of £562.50 or around 80% extra

Ask us how this works for your situation

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