SIPP - tax

1506moir

Hi, I'm self employed and looking at taking out a sipp, my question is do i declare my sipp contributions as a deductible expense. Example if I pay £1200 a year into a SIPP and my total income is £1000 do i pay tax on the full £10000 or tax on just £8800. Thanks.

Pennywise

No it's not a tax deductible expense. You pay your SIPP contribution net of basic rate tax, i.e. if you pay £800, the Govt pay the tax relief of £200 directly into your pension pot, so it becomes £1,000. You declare it separately on your tax return to obtain any higher rate tax due.

dunstonh

If you were a limited company then it would be a business expense. However, as you are not a limited company but self-employed, it is a personal contribution you are making and nothing to do with the business.