Trying to understand effect of SIPP contributions

Mikey481

I know this may have been covered in previous threads but can someone check i am not totally misunderstanding how SIPP contributions effect total taxable income.
2023/2024 tax year my total income including saving interest dividends and salary was 50980,  i also made a £2000 net SIPP contribution £2500 gross.
Would this reduce my taxable income liability to 48980 ?
HMRC have taxed my 40% on the £710 on the amount above 50270 i have talked to two HMRC people who didn't  seem to understand my question.
But i know someone will be along to give me a definitive answer that i can go back to them with if indeed they are incorrect.

Isthisforreal99

No, it doesn't reduce your taxable income but increases your basic rate band bt £2500. Did you notify HMRC of the SIPP payment?

Mikey481

Isthisforreal99 said:

No, it doesn't reduce your taxable income but increases your basic rate band bt £2500. Did you notify HMRC of the SIPP payment?

I did however not until December of 2024 because naively i thought that HMRC would automatically adjust without the need to tell them. Interestingly i did inform them of 2024/2025 SIPP contributions in June of this year and this has already been actioned as complete before the 2023/2024 online PPR1 !!
Is it just a case of waiting to let them catch up.

Dazed_and_C0nfused

Mikey481 said:

I know this may have been covered in previous threads but can someone check i am not totally misunderstanding how SIPP contributions effect total taxable income.
2023/2024 tax year my total income including saving interest dividends and salary was 50980,  i also made a £2000 net SIPP contribution £2500 gross.
Would this reduce my taxable income liability to 48980 ?
HMRC have taxed my 40% on the £710 on the amount above 50270 i have talked to two HMRC people who didn't  seem to understand my question.
But i know someone will be along to give me a definitive answer that i can go back to them with if indeed they are incorrect.

No, they have no impact whatsoever on your taxable income.

Have you actually made a claim for higher rate relief on your SIPP contribution?

From what you have posted it sounds like £710 of your income should be taxed at 20% rather than 40%.

Mikey481

Dazed_and_C0nfused said:

Mikey481 said:

I know this may have been covered in previous threads but can someone check i am not totally misunderstanding how SIPP contributions effect total taxable income.
2023/2024 tax year my total income including saving interest dividends and salary was 50980,  i also made a £2000 net SIPP contribution £2500 gross.
Would this reduce my taxable income liability to 48980 ?
HMRC have taxed my 40% on the £710 on the amount above 50270 i have talked to two HMRC people who didn't  seem to understand my question.
But i know someone will be along to give me a definitive answer that i can go back to them with if indeed they are incorrect.

No, they have no impact whatsoever on your taxable income.

Have you actually made a claim for higher rate relief on your SIPP contribution?

From what you have posted it sounds like £710 of your income should be taxed at 20% rather than 40%.

No I haven't made a claim for higher rate tax relief
Yes that's the point of the query just trying to get to the bottom of the issue

Dazed_and_C0nfused

Mikey481 said:

Dazed_and_C0nfused said:

Mikey481 said:

I know this may have been covered in previous threads but can someone check i am not totally misunderstanding how SIPP contributions effect total taxable income.
2023/2024 tax year my total income including saving interest dividends and salary was 50980,  i also made a £2000 net SIPP contribution £2500 gross.
Would this reduce my taxable income liability to 48980 ?
HMRC have taxed my 40% on the £710 on the amount above 50270 i have talked to two HMRC people who didn't  seem to understand my question.
But i know someone will be along to give me a definitive answer that i can go back to them with if indeed they are incorrect.

No, they have no impact whatsoever on your taxable income.

Have you actually made a claim for higher rate relief on your SIPP contribution?

From what you have posted it sounds like £710 of your income should be taxed at 20% rather than 40%.

No I haven't made a claim for higher rate tax relief
Yes that's the point of the query just trying to get to the bottom of the issue

I think my post crossed with your previous one. 

What does this mean then 🤔


I did however not until December of 2024 because naively i thought that HMRC would automatically adjust without the need to tell them. Interestingly i did inform them of 2024/2025 SIPP contributions in June of this year and this has already been actioned as complete before the 2023/2024 online PPR1 !!

Is it just a case of waiting to let them catch up.

Mikey481

Dazed_and_C0nfused said:

Mikey481 said:

Dazed_and_C0nfused said:

Mikey481 said:

I know this may have been covered in previous threads but can someone check i am not totally misunderstanding how SIPP contributions effect total taxable income.
2023/2024 tax year my total income including saving interest dividends and salary was 50980,  i also made a £2000 net SIPP contribution £2500 gross.
Would this reduce my taxable income liability to 48980 ?
HMRC have taxed my 40% on the £710 on the amount above 50270 i have talked to two HMRC people who didn't  seem to understand my question.
But i know someone will be along to give me a definitive answer that i can go back to them with if indeed they are incorrect.

No, they have no impact whatsoever on your taxable income.

Have you actually made a claim for higher rate relief on your SIPP contribution?

From what you have posted it sounds like £710 of your income should be taxed at 20% rather than 40%.

No I haven't made a claim for higher rate tax relief
Yes that's the point of the query just trying to get to the bottom of the issue

I think my post crossed with your previous one. 

What does this mean then 🤔


I did however not until December of 2024 because naively i thought that HMRC would automatically adjust without the need to tell them. Interestingly i did inform them of 2024/2025 SIPP contributions in June of this year and this has already been actioned as complete before the 2023/2024 online PPR1 !!

Is it just a case of waiting to let them catch up.

Really just that is there anything more i can do to progress this issue with HRMC

Isthisforreal99

If you are saying you sent the 23/24 claim in December 2024 then time to chase it up I would have thought?