SIPP and Tax

newatc

Thanks to freezing of tax thresholds, I'm in danger of drifting into 40% tax area. However I've suddenly realised that I may have more scope this year because I'm paying 2880 into my SIPP. So my question is if my taxable income (before SIPP contribution ) is 50k can I reduce that by 3600 for the Gross amount of SIPP? 

Dazed_and_C0nfused

newatc said:

Thanks to freezing of tax thresholds, I'm in danger of drifting into 40% tax area. However I've suddenly realised that I may have more scope this year because I'm paying 2880 into my SIPP. So my question is if my taxable income (before SIPP contribution ) is 50k can I reduce that by 3600 for the Gross amount of SIPP? 

No.

But you can increase your basic rate band by £3,600.

Marcon

If you give to charity, don't forget that could also help. The charity claims 20% from HMRC. If you pay 40% tax you claim the other £25 from HMRC, who will increase your basic rate band.

newatc

Dazed_and_C0nfused said:

newatc said:

Thanks to freezing of tax thresholds, I'm in danger of drifting into 40% tax area. However I've suddenly realised that I may have more scope this year because I'm paying 2880 into my SIPP. So my question is if my taxable income (before SIPP contribution ) is 50k can I reduce that by 3600 for the Gross amount of SIPP? 

No.

But you can increase your basic rate band by £3,600.

Thanks. The effect will be the same as my incorrectly described theory.