Avoid higher rate tax in employment with additional SIPP UFPLS income

Planet_Rock_Fan

GunJack said:

Am I missing something.....you want to minimise tax but are working and withdrawing from the sipp? Seems counter-intuitive..

Well, avoid paying any tax at 40% I mean. Happy to pay more tax for the bigger income, just minimising the tax rate to basic rate if possible.

Dazed_and_C0nfused

Planet_Rock_Fan said:

Dazed_and_C0nfused said:

Not sure why you are getting so hung up on reducing your taxable income really 🤔

Basically seems to be the simplest way to only pay 20% tax when I'm getting closer to higher rate already on my basic salary. If I up my salary sacrifice AVCs into the DB scheme to say £10k a year it would reduce my taxable income by £10k and allow another £10k taxable out of the SIPP at 20%, rather than all at 40% (plus the tax free amount). Seems like quite a large benefit to me. I'm looking for the same effect via a different route, ideally into the SIPP as I can get my hands back on it the year after, so to speak, without breaking recycling rules (I believe).

I still don't understand why you are so keen on reducing your taxable income.

You can get the same tax (not NI) benefit without needing to reduce your taxable income, you just seem focussed on one method when others do the same job, albeit in a more complicated way.

Planet_Rock_Fan

Dazed_and_C0nfused said:

I still don't understand why you are so keen on reducing your taxable income.

You can get the same tax (not NI) benefit without needing to reduce your taxable income, you just seem focussed on one method when others do the same job, albeit in a more complicated way.

Ok get that now - I suppose simplicity is (was) the key; if I could just let the taxman and SIPP provider sort it out among themselves as they have until now (with me doing some rough calcs to stay within the limits), that'd be ideal. But if that's not going to be possible, I'll have to bug you guys that actually know how to do a tax return and tax relief claim on how to do it! (I'll look for previous posts first of course). Thanks for all the inputs.

Dazed_and_C0nfused

Planet_Rock_Fan said:

Dazed_and_C0nfused said:

I still don't understand why you are so keen on reducing your taxable income.

You can get the same tax (not NI) benefit without needing to reduce your taxable income, you just seem focussed on one method when others do the same job, albeit in a more complicated way.

Ok get that now - I suppose simplicity is (was) the key; if I could just let the taxman and SIPP provider sort it out among themselves as they have until now (with me doing some rough calcs to stay within the limits), that'd be ideal. But if that's not going to be possible, I'll have to bug you guys that actually know how to do a tax return and tax relief claim on how to do it! (I'll look for previous posts first of course). Thanks for all the inputs.

You only ever get basic rate relief with "relief at source" contributions.

Unless you have to file a tax return for some reason then you now have to use this form on gov.uk when claiming any additional relief due.

https://www.gov.uk/guidance/claim-tax-relief-on-your-private-pension-payments