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Self Employed Tax credits & Pension

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I've taken a few years out from earning and paying tax. My profit had been <£6k so I get to claim £2.5k Tax credits as a single childless person.

Sales are climbing now though, I took a quick look at the tax situation and was slightly surprised to see that I can avoid losing the tax credits by making pension payments. Can the knowledgeable confirm I've not got this all wrong?

I read the rules as follows:

I get taxed on my trading profit (less tax allowance).

Then I could put all the net profit  except for £6k into my pension.

My income for Tax Credits assessment is then £6, so I still get a £2.5k handout.

(I then have to live frugally on £8500 plus any savings I want to dip into)

 

I wonder if this also applies to the high value TC recipients. Are there £100k earners stuffing it all into pensions and claiming £10k tax credits? 

 

 

 

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  • 406 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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