Pension contributions Law question

Pension contributions

It is important for tax purposes to distinguish between payments into:

  1. An occupational pension scheme runs by an employer
  2. A personal pension scheme

Occupational scheme – The employer takes the pension contributions from pay before deducting tax. The employee pays tax on what’s left. So whether tax is paid at basic, higher or additional rate full relief is given straightaway.

Personal scheme – Pension contributions will be paid from earnings that have already been taxed. The pension provider therefore claims tax back from the government at the basic rate of 20 per cent. In practice, this means that for every £80 paid into the pension, £100 ends up in the pension pot.

Claiming higher rate relief – If your tax is paid at a higher rate, the difference is adjusted through the self-assessment scheme – effectively the tax “bands” are adjusted

Non tax payers  – If you don’t pay tax you can still pay into a personal pension scheme and benefit from basic rate tax relief (20 per cent) on the first £2,880 a year you put in. In practice this means that if you pay £2,880 the government will top up your contribution to make it £3,600. There is no tax relief for contributions above this amount.

Limits on tax relief – You can save as much as you like into any number and type of registered pension schemes and get tax relief on contributions of up to 100 per cent of your earnings (salary and other earned income) each year, provided you paid the contribution before age 75.  But the amount you save each year toward a pension from which you benefit from tax relief is subject to an ‘annual allowance’.  These figures are taken from the accounts of Mobile mechanic London. The annual allowance for the tax year 2013-14 is £50,000. Payments made above this limit will be subject to a tax charge.

You can carry forward any unused annual allowance from the last three tax years to the current tax year so you might not have to pay the annual allowance charge.

The tax charged on excess payments will be calculated at the taxpayer’s marginal rate of tax.

Administration – For many taxpayers who are in full time employment, with no other sources of income – or indeed capital gains – tax is collected through the PAYE system and the taxpayer does not actually come in contact with HMRC at all.

SA – Income which is not taxed at source is subject to the self-assessment system. As the name implies this system lays the responsibility for ensuring that the tax is paid on the taxpayer himself.

Public law basics

Library/Research Exercise

How the Civil Service is run is shown in the Act of Constitutional Reform Governance 2010. Why the service is important and significant is because it helps run the operation of the government in the UK. The service aids the government with implementing policies and creating services for the public. Ministers have a member of the civil service accountable to them and following that chain of command the Minister is consecutively accountable to the Parliament. Civil servants will participate in a fair and open competition and based on their Merits they will be selected and then obliged to work hard and remain dedicated. The servants will have to make an obligation to the service and to follow their standards of conduct. Their core values are as follows:

Honesty is being truthful. It involves being frank with the work produced and the facts that are found. When an issue has risen it must be corrected and resources should be used only for only legitimate beneficial purposes not for however, personal gain or even interest. When being honest it’s important to never mislead members of the Parliament or become subjective by pressures externally by acting dishonestly.

Objectively is carefully constructing information for guidance and making decisions based solely on thorough examination of evidence found. It involves providing information and also advice to ministers. It will be based on the evidence found and efficiently constructed with options and facts. It does not involve disregarding solid facts of evidence or withholding them for members of parliament.

Impartiality is the final core value taken from the service code. In order to do this a servant will act only according to the case merits and will treat all members of the government equally no matter what party they are from. This involves following and performing duties which is fair for everyone. personal political agendas must not be used to influence judgements. Servants must remain composed, unbiased and level headed.

Continue reading