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Tiny income - how much to pay into SIPP?
I am a sole trader. I have been off work for nearly 6 months. I intend to return; I'm just not sure when.
My turnover for this tax year is very low (£6500 approx) as I was already slowing down my hours before I stopped. When I subtract expenses I am left with approximately £400.
My question is this: do I only pay the £320 (400 x 80%) into my SIPP? Or do I pay in the minimum £2880 that people who are not working at all can pay in, and add the £320 on top?
I cannot find the answer anywhere. Thank you for your help.
Comments
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Everyone is allowed £2880 (£3600) irrespective of their income, you cannot add your income on top of that - you are allowed the higher of.
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....but tax relief on personal contributions stops when you reach age 75.
Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!1 -
Thanks - just to clarify: you mean I could add either the 2880 or my income, whichever is the higher?
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£2880, or your profits whichever is higher I think (as you are self employed)
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For clarity - you can add £3600 gross or your profits gross.
Gross in this case means with the basic rate tax relief included.
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