Tax relief on pensions

Mrc44

Hi,  can someone please clarify exactly how the tax relief works regarding self employed paying in sipps works , I am self employed under cis so pay 20% tax at source before then contributing to my sipp, I understand employed people’s contributions are done before tax deductions on wages? So am I right in thinking as I’ve paid tax before my contributions then had the relief added on I am back to a level playing field but file my contributions on my self assessment return and get the tax relief there (I’m a hr tax payer). There’s a big chance I could be getting this totally wrong so any clarification is a great help. 

Also I currently pay into a S&S isa and a sipp but am trying to weight up wether it would be advantageous for me to open a s&s Lisa alongside these (for retirement purposes) , if I contribute £4000pa to a Lisa the 25% bonus outweighs performance on a s&s isa by a fair margin on a like for like basis? 

Thank you for any help

colsten

You should probably ask your questions on the Pensions board.

Mrc44

colsten said:

You should probably ask your questions on the Pensions board.

Sorry this is in the wrong place, how do I move it over to the right board? 

Thank you 

afis1904

You will get the basic rate relief added to your pot automatically and as a HR taxpayer you'll be able to claim the higher rate relief back in your self assessment.

nomorekids

If you are a basic rate tax payer, you will get your payment automatically enhanced by the basic rate (time 1.25) claiming the extra if you are an upper rate tax payer is done through self assessment. The starting amount on which you pay upper rate tax will be increased by your pension payment. You will then obviously have to earn more than this new amount on which only basic rate tax is payable to benefit fully.

Hope this helps?