Too Late to reduce tax amount for 2020/21 tax year ?

BigBlueSky

Due to last minute and unexpected earnings in the 2020/21 tax year I ended up the year in the higher rate tax bracket (normally basic rate).  I went over by around £15,000.

Normally I try to say tax efficient, and in this situation I would have normally made additional contributions into my SIPP to reduce the amount of tax payable at the higher rate.

I've been looking into pensions and it doesn't seem possible to backdate a contribution.

Does anyone know of any other tax efficient investments that would allow this ? - I've previously invested in VCT's and SEIS, but not sure if these would be the same.

Thanks in advance

csgohan4

You can generally only claim things in that tax year it happened. So any direct retrospective investments will not count towards the previous tax year. I would make a habit it putting more money into your pension and look at what the pension is invested in as well. 

if it was a bonus, can you not defer it to this year for example? Means you got some time to consider your options

Dazed_and_C0nfused

One thing that does work is carry back of Gift Aid contributions.

If you read the 2020:21 Self Assessment tax return notes (for the core return) it explains about this a bit more.

BigBlueSky

Thanks for the replies.  No, it wasn't a bonus but all self employed income.

It looks like the tax relief from SEIS / EIS investments can be applied to the year prior to the investment year so that might work.