Self assessement tax returns and pensions
What happens to my self assessment tax return if I'm paying into a pension?
Depending on the type of pension scheme you're using, making regular contributions to it can change your tax calculation. If you're getting a pension but still working, you may have to file a self assessment tax return whether you're self-employed or not.
- Employer's scheme: The basic pension plan. You don't have to do anything, as it's all taken care of at source.
- Private pension: this option takes a little more paperwork. You'll still be taxed on your full income, but can claim tax relief to top up your pension contribution.
- Salary sacrifice: this is where you're taking a reduced salary in return for pension contributions from your employer. This can cut down your National Insurance payments, and can be quite an efficient option.