YouTube payments and Pensions

wellingutd

Hi.  I am fortunate enough that on starting a spare time YouTube channel, I am now receiving some small monthly payments from adverts (£100 to BEST £300).  As I have a Full Time job, I will end up paying tax on this at year end.  I wish to therefore put this into a SIPP and as I hold a personal one with Aviva this is possible.  However, when I go to pay in the monthly YouTube income from a personal account the tax relief of 20% gets automatically applied.  I don't beleive I want this as it will mean I have to still pay the tax bill at the end as I cannot claim the tax relief twice (on paying into my pension and year end tax return).  Is this correct and if so, how can I remedy? 

pramsay13

I believe you will need to do it that way so pay it into your pension pot and get the extra applied, then complete a tax return at year end and pay tax owed.
Your only other option would be salary sacrifice in your main job by the amount of extra income you get. 

wellingutd

In "tax owed" will it be the 20% tax relief applied i ow only OR whatever the tax is at year end for this considering where it puts me with my employment income added? 

Dazed_and_C0nfused

wellingutd said:

In "tax owed" will it be the 20% tax relief applied i ow only OR whatever the tax is at year end for this considering where it puts me with my employment income added? 

For most people contributing to a relief at source (RAS) pension doesn't alter the income tax they have to pay.

For example if you made a profit of say £3,000 then you could well have an extra tax liability of £600 and contribution to a RAS pension isn't going to change that.

If you also added £2,400 to a RAS pension the pension company would credit you will £600 in pension tax relief giving you a pension fund of £3,000 but you would still owe HMRC £600.  There is no direct link between the tax you owe and any pension tax relief you get.

Plenty of people who don't pay any tax get pension tax relief each year.

Albermarle

As you have a full time job, presumably you have a workplace pension you contribute to?
Contributing more to this rather than a personal pension, may or may not be a better option.
It partly depends on how your workplace contributions are made . If it is by salary sacrifice, then most likely you would be better off just increasing your % contribution to the workplace pension.
It makes zero difference to your overall tax ( or tax relief position), whether you contribute to one pension or two.