SIPP tax refund timing

vincentvalentine

Hi,

I am planning to contribute a fairly significant sum to my SIPP this tax year, just ahead of the deadline. I am a higher rate tax payer so I believe I get a refund directly back from HMRC to 'top-me up', in addition to the direct bonus I get when I contribute to the SIPP.

My question is this - when and how does this tax get returned? I understand usually it comes out in your PAYE - I guess they charge you less tax? - but obviously I will contributing right at the end of this tax year. So there are no more PAYE periods for them to refund me.

Thanks in advance

ModernEA

You can claim the refund in your personal tax return.

hugheskevi

Sort it out as part of self-assessment, or if you do not do self-assessment send HMRC a copy of your P60 and evidence of pension contribution when they are available to get a refund by cheque.

You could have informed HMRC of your plan to make a pension contribution, in advance of actually making the pension contribution, and HMRC would then change your Tax Code to give you the relief through PAYE, even though the contribution isn't being made until the end of the tax year.

Personally I change my Tax Code around January each year, and then any small differences are dealt with in self-assessment.

David.s_2

I have just looked at this and eventually paid in a lump sum to a new SIPP from my company, I'm a PSC.
If the company buys you a (new SIPP) pension, it contributes gross up to £40K. Tax relief comes later through the company tax return. If you pay in yourself, you pay only the tax relieved amount into the SIPP and they collect the balance from the taxman. So you would get the relief up front. Limited to gross equivalent of £40K or max salary whichever is the least. ie. £34K max and credited with £40K if your salary is more than that excluding dividends, and possibly other income taxed as unearned income. Not sure about details of the latter. If you already have a SIPP set up for previous years you can contribute a bigger lump sum, possibly £140K.

vincentvalentine

Thanks for your advice.

I will inform HMRC as to my plans for next year, so I get the tax benefits 'drip-fed' through the year as opposed to the issue I have now.

I have never filled in a self-assessment form before. I have to do so for the tax year now ending for other reasons. If I do so, on April 6th, for the tax year that'll just have ended (and during which I will have made the significant contribution) will I be waiting until the following January to receive the tax refund? I am not familiar with the process.

Thanks again.

xylophone

will I be waiting until the following January to receive the tax refund? I am not familiar with the process.

You complete the return, send to HMRC and wait...it is usually a few weeks but can take longer.

greenglide

... and it is an automated process, normally you are not waiting for somebody to actually look at the self assessment. You will use the online self assess service, wont you? The online version is easier and simpler (IMHO) and calculates the tax due or refund due automatically.

And you can claim extra relief for any Gift Aid donations you have made and also the declare any interest etc you receive if HRT is due.

bowlhead99

Generally if I'm expecting a decent refund I'll do my tax return online in about July once I've got my P11D, checked all my bank accounts for interest, and know all my final numbers for the tax year to the April just ended. It can take a few weeks for them to send the cash, but they do it directly to your bank account these days instead of cheque if you put those details on the return.

Alternatively if I owe *them* money I'll take my own sweet time about it and submit it together with payment in the last week or two of the following January!

This year I'll be getting a refund (pension and VCT contributions being much bigger than interest income) so I should probably do it in the next few weeks... but if I leave it another couple of months I can get my P11D and find out exactly what my employer spent on my health insurance, and properly finalise my account for the year, rather than estimating it and having to fix the odd few quid later.

I'd really prefer to have the few thousand quid in my hand sooner rather than later so might have to guesstimate the P11D number and just get on with it!