Self employed basic to higher rate income tax

Dh6

“The gross amount of any personal SIPP contribution is deductable for HICBC purposes.”

The above statement I’ve copied and pasted from another HICBC thread. Is it correct? 

MX5huggy

Dh6 said:

“The gross amount of any personal SIPP contribution is deductable for HICBC purposes.”

The above statement I’ve copied and pasted from another HICBC thread. Is it correct? 

In a broad sense it’s correct. But we should use precise terminology. HICBC is calculated based on Adjusted Net Income. A previous post linked to HMRC’s description or ANI. 

Dh6

I appreciate that MX5 but I’m struggling to fully understand the links posted. 

I’d specifically like to know how I can reduce my adjusted net income below the HICBC threshold. 

Will my SIPP contributions as a self employed sole trader enable me to do this?

many thanks 

Dazed_and_C0nfused

Dh6 said:

I appreciate that MX5 but I’m struggling to fully understand the links posted. 

I’d specifically like to know how I can reduce my adjusted net income below the HICBC threshold. 

Will my SIPP contributions as a self employed sole trader enable me to do this?

many thanks 

Yes, if your SIPP contributions are made using the relief at source* method (which they almost certainly are) then they can be deducted when calculating your adjusted net income.

What they don't do is reduce your taxable income.

*If the pension company adds 25% to your contribution then they are relief at source

Dh6

Thank you so much