SIPP contribution tax reclaim.

Sid1982

was made redundant made redundant a few months back. Received my redundancy payment and was taxed on it PAYE at 40% for everything over £30k due to the timing of the redundancy and also far into the tax year we were.wevwer

i'm looking into investing some of it into a SIPP in order to claim some of the tax that was deducted at source on the payment. In order to do this would I have to make a self assessment claim? I'm inot planning on going back to work for a bit and having a break. Would I need to sort this SIPP out before before the end of the financial year or can I take my time?

DRS1

You would need to sort the SIPP out and make the contribution in this tax year - so get your skates on.

No need to do a self assessment. There is an online form here

Claim tax relief on your private pension payments - GOV.UK

Sid1982

Oh right, I'd read i could claim for upto 4 years afterwards.but that seemed insane!

NoMore

https://forums.moneysavingexpert.com/discussion/comment/81935267#Comment_81935267

You can claim respectively but you still have to make the actual contributions in the tax year you wish to claim for.

So as long as you make contributions before April 6th 2026, you then have 4 years to actually claim any tax relief owed, but in your case I wouldn't expect you to take that long.

Sid1982

https://forums.moneysavingexpert.com/discussion/comment/81935313#Comment_81935313

So I haven't got haven't got to do it before the end of this financial year and rush things? That suits me while I evaluate things and of course see course see how this middle east conflict pans out long term.

Just to confirm if I pay into a SIPP by 2027 I can claim my 40% tax back on my redundancy payment from last December even if I'm no longer working or working but not paying higher rate tax anymore?

Thanks in advance

DRS1

NO you can't. You need to make the pension contribution in the tax year you have the earned income. You can't backdate the contribution or carry forward the earned income to the next tax year (the way you could for the annual allowance).

So you need to make the contribution by 5 April 2026 (and don't forget that Easter is going to get in the way so do it NOW).

DRS1

The bit about claiming for 4 years afterwards is I think for those people who made pension contributions in a year but didn't realise at the time that they could (or had to) claim for higher rate tax relief. It doesn't mean you have 4 years to make the contribution.

NoMore

https://forums.moneysavingexpert.com/discussion/comment/81935381#Comment_81935381

That is not what I said, you have to make the contribution to the Pension this financial year (ie before April 6 2027) but then you have up to four years to actually make the claim, so there is a rush to make the contribution but no rush to claim.

DRS1

https://forums.moneysavingexpert.com/discussion/comment/81935405#Comment_81935405

I think you may be pressing the wrong numbers - this tax year ends on 5 April 2026.

Sid1982

Thanks both for clarifying 👍

NoMore

https://forums.moneysavingexpert.com/discussion/comment/81935415#Comment_81935415

Oops sorry for any confusion, not sure why I was saying 2027!! It is of course 2026!

No wonder I was confusing the OP. Thanks DRS1 for pointing out.