UK Income tax bands and pension contributions

Albermarle

lisyloo said:

Romesh said:

Dazed_and_C0nfused said:

The simple answer is yes.  But possibly not quite how you think.

Which method will you be using to get money into your pension?

Net pay

Relief at source

Salary sacrifice 

Hi, I was thinking about paying into my SIPP, but I'm also a member of USS, so I believe I have the option of paying more into that - I haven't worked out which would be better yet.

If you're employer does salary sacrifice then you are better off doing that as you will also save employees National insurance.
Unless of course there is something undesireable about the pension scheme (I'm not familiar with USS).

If you put money into your SIPP then you either have to let HMRC know or do self assesment.
The extra tax relief will then you into your pocket (not your pension).

If you're affairs are simple then they may accept a letter/email.
If they are more complex (and you mentioned dividends) then it might be done by self assement, so you'd get the higher rate tax relief in arrears.

Normally you would not need to do self assessment, just because you are a higher rate taxpayer and make RAS pension contributions. In fact HMRC discourage self assessment where not necessary. There are a series of questions you have to answer yes to, before it is allowed.
Usually you get the higher rate relief/rebate, the tax year after the one you first claim it for (however you claim it).
Then HMRC adjust your tax code, so you start getting more take home pay and no need for rebates later. They assume your level of contribution stays the same each year.