SIPP and Child Benefit Charge

TDS_2

Hi,

I am currently earning over £50k, but am contributing into a SIPP enough to bring my post contribution salary below the £50k threshold for Child Benefit Charge.

How does this all work?!

I currently claim back HR tax on all SIPP contributions above the HR threshold (which is the entire annual contribution in my case). Do I pay pay the appropriate Child Benefit Charge upfront for my total salary and then claim this all back at the same time that I get the HR tax rebate?

Confused!:(

fuelcrusher

You will not have to claim anything back regarding the child benefit because as long as your pension contributions take you below £50k then HMRC will not charge you any child benefit 'tax' when you fill out your self assessment.

mania112

Yep, so the reason you're claiming tax relief on your pension contribution is to make it tax free.

Which kind of proves that your taxable income is under £50k.

You can also donate to charity via gift aid to reduce your 'Net Adjusted Income' - if you're into that sort of thing.