Silly SIPP tax question

NoMore

Paul_Herring wrote: »

You need to fill out a self-assessment after tax-year end, and then they pay you directly:

https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief#when-you-have-to-claim-tax-relief

If you don't tell them, you don't get it automatically.

Agree you have to tell HRMC, but not necessarily via a tax return, you can just tell them during the tax year and they will more than likely adjust your tax code for that tax year. Its what I do every year, never have to fill a self assessment in.

Johnnyboy11

NoMore wrote: »

Agree you have to tell HRMC, but not necessarily via a tax return, you can just tell them during the tax year and they will more than likely adjust your tax code for that tax year. Its what I do every year, never have to fill a self assessment in.

I do this too, by letter to HMRC enclosing proof of the gross contribution (Pension account statement or similar). Usually receive a new tax-code within a couple of weeks, and employer notified automatically.

Paul_Herring

For completeness:

https://citywire.co.uk/funds-insider/news/how-to-claim-higher-rate-tax-relief-on-your-pension/a579313

You can also claim the difference by telephoning 0845 900 0444 or writing to HMRC if you are a 40% income taxpayer. If you pay 50% tax this must be done through your tax return.

xylophone

I'm intrigued as to what prompted the assumption about Net Pay.

The OP said

I asked Payroll at my company and they said that they can't put the money in pre tax like they do with my company pension.

barnstar2077

My company pension is with aviva and they seem to offer very limited options for selecting your own investments. Several of them are just invested in each other.

Albermarle

If you start a separate SIPP and it has two thousand funds to choose from, and other options like investing in ETF's and individual shares, will you actually know the best to choose, and/or have the time to do all the research ? Probably not and you will end up in one of their lifestyle/multi asset funds , so most likely not much different from what you have with Aviva.
You also need to compare charges . Normally a low cost SIPP provider will have lower charges than a pension with the likes of Aviva. However your employer may well have negotiated lower charges.

DairyQueen

Albermarle wrote: »

If you start a separate SIPP and it has two thousand funds to choose from, and other options like investing in ETF's and individual shares, will you actually know the best to choose, and/or have the time to do all the research ? Probably not and you will end up in one of their lifestyle/multi asset funds , so most likely not much different from what you have with Aviva.
You also need to compare charges . Normally a low cost SIPP provider will have lower charges than a pension with the likes of Aviva. However your employer may well have negotiated lower charges.

OP will probably not initially know how to invest but a SIPP is an excellent learning opportunity. If OP is interested in learning more about investing, even just to monitor what is happening with their company scheme, then this is a good way to do so.

OP: OH and I have been running SIPPs alongside our other pensions for several years. I have learned a massive amount, including how to assess whether our DC schemes are good value (and are invested appropriately).

Heartily recommend that you open a SIPP as another pension vehicle.

Over time your total pension pot will grow and the need to undertake regular review will become more important. Managing your pension funds continues throughout retirement. You will benefit from knowing as much as possible.

barnstar2077

Thank you Dairy Queen. I am working my way through the Early retirement wannabe thread, plus a few books I have bought based on recommendations from this forum. I will not start a SIPP until April now as I want to get my ducks in a row before taking the plunge, which includes reducing my mortgage and possibly receiving a cash boost from a relative in the mean time. The delay will give me plenty of time to reread the books and to build up my confidence. Some of my family and friends have been very seriously ill recently which has made me realise that I need to retire earlier and enjoy life while I am still able to do so. Also the thought of learning and managing my own SIPP will hopefully provide enough mental stimulation to get me through what would otherwise be a fair few years of tedious menial work! : )

DairyQueen

barnstar2077 wrote: »

Some of my family and friends have been very seriously ill recently which has made me realise that I need to retire earlier and enjoy life while I am still able to do so. Also the thought of learning and managing my own SIPP will hopefully provide enough mental stimulation to get me through what would otherwise be a fair few years of tedious menial work! : )

Sounds like a good plan.
Lots of great advice available on this forum; I have learned more here than from any other source.
Best of luck and keep asking questions.

Ian011

Paul_Herring wrote: »

You can also claim the difference by telephoning 0845 900 0*** or writing to HMRC if you are a 40% income taxpayer. If you pay 50% tax this must be done through your tax return.

HMRC does not use premium rate numbers starting 084 or 087. HMRC moved their premium rate 0845 and 0870 lines over to cheaper 03 numbers (mostly 0300 and 0345) in several batches between April and October 2013 - more than five years ago.

Any premium rate numbers starting 084 or 087 found online and purporting to be for HMRC are either out of date or are fake, e.g. examples of the "call connection service" scam. Likewise any such numbers starting 09 that you may find are also scams.