Segment from a YouTube talk by Ndubuisi 'Andy' Egwim explaining strategies to reduce adjusted/net taxable income for medics. The speaker emphasizes increasing pension contributions (including into a SIPP) to use the £60,000 annual allowance and describes using carry forward — reclaiming unused allowances from the prior three tax years — to further reduce taxable income.
I'm going to reduce my adjusted net income, therefore reduce my taxable income. And one of the ways, there are 10 ways and I've written a free guide about it. Someone from my team can share the guide, how to avoid the 60% tax trap. But basically the number one way, the best way we've seen is increasing your pension contribution, making sure that you are using the whole £60,000. So for instance, Coyote can decide, you know what my NHS pension port is, is showing that my pension growth in this tax is 40,000 pounds. So I can put in an extra 20,000. Okay, he will not do 20,000, obviously, because he's going to get tax relief. So because the 40% taxpayer, he might even go ahead and put in an extra 8,000 or 10,000 and that can reduce the adjusted income. Now he can even go ahead and put more than 20,000 because why you allow 60,000 in a tax here? But if you missed last year, you didn't use a 60, 000 and you missed last year. And see Kayode and Sim, I'm like, okay, yeah, they're getting my point. So you can do what we call carry forward. Now, tax language can be confusing. Carry forward means moving backwards. Carry forward means you can go back and use up the allowance from the past three years. So this year, last year and last two years. So your allowance is not going to be six years, thousand is going to be 180,000. So when you do that, you reduce your taxable income. But where does the money go? It goes into your personal pension. I remember what is called sip, self invested Personal pension. That means you can now invest it by yourself.
