Top rate tax question

[FluffySheep]

Hi all

Long one, and a specific question, I'm not certain if you lot will know the certain answer or be able to direct me to it.

I work as a teacher, and my pay now will be £51,742pa, with the top rate tax bracket in Wales kicking in at £50,271. My tax code is 1394 due to married tax allowance, WFH and other bits and bobs (all legit, I'm happy for the tax man to question this!). When the new tax year hits in April I'll be ineligible for marriage allowance as I'll be a top rate tax payer. As I'm just over the threshold it means my pay will drop more than I'll get from the pay rise because of the increase in tax and loss of tax benefit. My idea (from someone I know) is to start Added Voluntary Contributions (AVCs) to my public pension. If I pay £1500pa this drops me below the 40% tax bracket and I keep marriage allowance, get another (small) pension when I retire and generally be better off. Does this all make sense and I know it's legal to have AVCs, but will it muster past the tax man? Will I get to April 2026 with a surprise tax bill somewhere I missed?

Thanks in advance
FluffySheep

 

[Bounce]

Yes that will work , we do it at our workplace every year we have bonus and if you put it into a pension it’s not taxable.

 

[tamzzy]

Yes it makes sense.
What doesn't make sense is the marginal tax rate (your example shows why).

 

[MichaelAwkward]

Check which way you're paying your pension - there's a chance it's salary sacrifice, in which case it makes sense to permanently alter that going forward rather than AVCs, as you'll then save on NI as well.