40% Taxpayer - SIPP To Reduce

tbm_2

Toki wrote: »

One other question, the 2011-2012 tax year is over now obviously, can I retrospectively claim this amount back or would I have to have done this before April 5th of this year? Basically am I too late to do this?

Unfortunately, you are too late for the 2011-2012 tax year.

kidmugsy

Assuming you do this during the 2012-13 tax year, do remember that when you fill in your tax return you must quote the GROSS amount that you contributed to the pension, not the net amount that you wrote the cheque for.

getmore4less

Don't forget other income(eg:investments) that is taxable in the pension contribution.

Toki

tbm wrote: »

Unfortunately, you are too late for the 2011-2012 tax year.

Thanks, I take it the carry forward doesn't mean you can claim the relief on last years taxable outcome and any payment made this tax year will come out of this years earnings?

jem16

Toki wrote: »

Thanks, I take it the carry forward doesn't mean you can claim the relief on last years taxable outcome and any payment made this tax year will come out of this years earnings?

No it doesn't.

The carry forward would only allow you to pay more than the £50k annual limit but you won't get any more tax relief.

Basically the payment must be made in the tax year that you are claiming relief for.

Toki

Following on from this thread earlier this year, I intend to pay into a SIPP this current tax year.


I expect to earn £62,046 and want to avoid paying 40% tax altogether. My tax code is 1604L currently as I pay into a company pension also which I receive tax relief on. Is my calculations below correct on the amount I should pay into my new SIPP?


20% threshold for me is £45,649.
40% tax paid on £16,397 which equals £6,559.


Am I right in saying I need to pay £16,397 gross (once the 20% tax relief is added). In other words, I put £13,118 net (my own money) into my SIPP.
I don’t currently complete a self assessment so will write a letter to the HMRC, will they adjust my tax code for the higher tax relief once I provide evidence?


Thanks again in advance.

jem16

Toki wrote: »

Am I right in saying I need to pay £16,397 gross (once the 20% tax relief is added). In other words, I put £13,118 net (my own money) into my SIPP.

That's correct. It's actually £13,117.60 but I doubt 40p will make a difference.

I don’t currently complete a self assessment so will write a letter to the HMRC, will they adjust my tax code for the higher tax relief once I provide evidence?

Yes they will. They will probably adjust it without evidence.