40% tax and Pensions

CLAPTON

crux wrote: »

I honestly can't remember, if the SA asks about it then I will have filled it in.

From memory they ask about income and benefits from employment, and income from self employment. I can't remember anything about pension contributions.

Anyway I'll check it out, I know I have copies of the tax returns saved in old backup files.

It's not possible for HMRC to work out tax owed without knowing payments to pensions

crux

That's understandable, and so I probably already got anything owing accounted for in my tax paid at the time.

Thanks for the help everyone.

lisyloo

From memory they ask about income and benefits from employment, and income from self employment. I can't remember anything about pension contributions.

It definitely there. That's how a lot of people claim it back, but as jem points out that goes in your pocket not in your pension.
If you want it in your pension, then you either need to make a lump sum or increase your contributions to account for it.

middlepuss

lisyloo wrote: »

If you want it in your pension, then you either need to make a lump sum or increase your contributions to account for it.

Have I got this right...?

If I earn £1000 on which I would normally pay 40% tax, I send a cheque for £800 to my SIPP provider, the SIPP provider gets £200 from the tax man and I've now got £1000 in my pension.

On my tax return I declare a gross pension contribution of £1000. As a result the tax man only charges me £200 tax on that £1000 - rather than the £400 he would have taken had I not made the pension contribution. The £200 he does take from me is the £200 he gave my SIPP provider.

lisyloo

the SIPP provider gets £200 from the tax man and I've now got £1000 in my pension.

I can't say for sure with SIPPs (I suspect it does work that way).
It certainly does work that way for GPP (grouped personal pensions) operated by employers.

On my tax return I declare a gross pension contribution of £1000. As a result the tax man only charges me £200 tax on that £1000 - rather than the £400 he would have taken had I not made the pension contribution. The £200 he does take from me is the £200 he gave my SIPP provider.

Yes right.
How they do that is by moving your personal 40% threshold.
So right now it's £37,400 for everyone.
If you declare £1000 gross pension contribution, they will move it to £38,400. You should get a statement showing their calculation.

Charity gift aid works that way too.