Self Assessment SIPP tax relief - timing discrepancy between payslip and credit to SIPP

MatildaR

Hi all,

I am filling out my self assessment and have a question regarding the section where I claim the additional tax relief on SIPP contributions (I have never had to do this before). I started a new job in August, and from my September payslip (paid on the last working day of every month) I have had £3,000 taken out as additional voluntary contributions into my SIPP. So from end-September to end-March I have had 7 x £3,000 = £18,000 in contributions taken out from my payslip.

However, when I look at my Hargreaves Lansdown account, that £3,000 contribution only gets credited to my SIPP around the 20th of the following month. Therefore, the end-March contribution is not credited until 20 April, and so does not show up on my SIPP contribution summary for the 2021/22 tax year.

My question is, when filling out my self assessment, do I include the 7th March amount, such that the figure I put in for Gross Contribution is:
(a) 7 x (£3000 x 1.25) = £26,250
or do I need to go by when it hits my SIPP such that the amount I can claim for in this year's self assessment is:
(b) 6 x (£3000 x 1.25) = £22,500

Many thanks
M.R.

Dazed_and_C0nfused

It looks like £22,500 to me,

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm041000#IDA0QUFG

Member contribution made via employer deduction through payroll

The employer effectively acts as collection agent for the transmission of employee contributions taken from their pay and passed on to the relevant pension scheme administrator.

The date of payment in the case of a contribution made under the net pay arrangements is the date of deduction from the employee’s pay.

The date of payment for a contribution made under Relief at Source, for example to a group or other personal pension scheme, is the same as a payment the member makes direct. For example the date authorised to draw money by direct debit from the employer’s bank account or the date the employer’s cheque is received.

AlanP_2

Dazed_and_C0nfused said:

It looks like £22,500 to me,

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm041000#IDA0QUFG

Member contribution made via employer deduction through payroll

The employer effectively acts as collection agent for the transmission of employee contributions taken from their pay and passed on to the relevant pension scheme administrator.

The date of payment in the case of a contribution made under the net pay arrangements is the date of deduction from the employee’s pay.

The date of payment for a contribution made under Relief at Source, for example to a group or other personal pension scheme, is the same as a payment the member makes direct. For example the date authorised to draw money by direct debit from the employer’s bank account or the date the employer’s cheque is received.

I've wondered about this as the March salary deduction under Net Pay scheme is credited by the provider the following tax year normally. Looking at provider's tax certificates they reflect the date they process the contribution not the date payroll deduct it. In practical terms that's easier for them obviously.

My OHs birthday is just before start of new tax year and the situation could arise that she retires at normal scheme age and the provider reports a contribution the following year when she had no salary. Given that we could be loading her AVC pot to the hilt in the last few months of employment and intend to contribute £3600pa to SIPP once retired it could raise a query from HMRC.

Absolutely classic First World problem I know.

MatildaR

Dazed_and_C0nfused said:

It looks like £22,500 to me,

Thank you very much for the link! 
While usually it would all come out in the wash, my marginal tax rate for 2021/22 was 60%, whereas it won't be this year, so was hoping that last contribution would fall into last year, but alas!