SIPP ?

A_Aardvarkie

HI,

I earn ~£54k, 52yr old

10% into company pension

extra £6k into AVCs before tax

no mortgage or debts

£30k emergency pot in a Cash ISA & a small S&S ISA

I am trying to work out if to start a SIPP which I could do with my current S&S provider. I know I would get the 20% tax relief via the provider. Would I still be eligible for further tax relief via a tax return or does the extra AVC contribution mean its pointless doing a tax return ?

TIA

eskbanker

If you're not paying any income tax at 40% then you can't exceed 20% tax relief on pension contributions.

Dazed_and_C0nfused

You normally don't need to complete a tax return just to claim any tax relief due on pension contributions.

But in any case unless you omitted some relevant information your taxable income appears to only be £42.6k so there would be no additional relief due anyway unless you are Scottish resident for tax purposes.

Alexland

Also worth considering if your employer operates salary sacrifice to save the national insurance on workplace pension contributions. If so by comparison it would be inefficient to contribute directly to a SIPP.

A_Aardvarkie

Eskbanker to get the tax relief on SIPP contributions above 20% you do need to complete a tax return. Since I'm paying AVCs such that my taxable income is 48k, which is less than the higher tax band  PA+37.5k = 50k, then I think I gain nothing by doing a tax return. I just wanted to confirm it

Albermarle

Eskbanker to get the tax relief on SIPP contributions above 20% you do need to complete a tax return.

No you do not need to complete a tax return. All you need to do is to inform HMRC directly about your contributions .Or you can go via your personal tax account online .

They are generally discouraging people from completing tax returns unless really necessary .

Dazed_and_C0nfused

A_Aardvarkie said:

Eskbanker to get the tax relief on SIPP contributions above 20% you do need to complete a tax return. Since I'm paying AVCs such that my taxable income is 48k, which is less than the higher tax band  PA+37.5k = 50k, then I think I gain nothing by doing a tax return. I just wanted to confirm it

Not if that is the only reason you don't.
There are plenty of posters on here who get higher rate relief on relief at source pension without needing to complete a return.
If you have to complete one for some other reason then you would include the relief at source pension contributions on the return.

eskbanker

A_Aardvarkie said:

Eskbanker to get the tax relief on SIPP contributions above 20% you do need to complete a tax return. Since I'm paying AVCs such that my taxable income is 48k, which is less than the higher tax band  PA+37.5k = 50k, then I think I gain nothing by doing a tax return. I just wanted to confirm it

I wasn't addressing the question of whether or not you needed to complete a tax return, I was just pointing out that it's moot because you're not eligible to claim any further tax relief anyway, so the means of actually obtaining that relief are irrelevant.