SIPP contribution needed?

sultan123

Having salary sacrified throughout the year, I am now down to gross salary of 112k and cannot put do any further pension contributions.

I plan to put some money into a SIPP to get me under 100k.

Will a bank payment of 10k from myself be enough in view of 20% claim back or should I pay 12k from bank account into SIPP?

El_Torro

If your goal is to add £12k gross to a SIPP then you should pay in £9.6k. The SIPP provider will then gross this up to £12k.

Marcon

https://forums.moneysavingexpert.com/discussion/6661234/sipp-contribution-needed

How much have you salary sacrificed? If total pension contributions in the year (personal + tax relief, plus employer contributions including those made by salary sacrifice) exceed £60K, then you'll incur a tax charge for breaching the annual allowance unless you have carry forward available from the last 3 years. Do you?

sultan123

https://forums.moneysavingexpert.com/discussion/comment/81936728#Comment_81936728

Thanks so will that then take me down to below 100k?

sultan123

https://forums.moneysavingexpert.com/discussion/comment/81936755#Comment_81936755

Yeah I have carry over from last 3 tax years so adding more money into SIPP not an issue.

Can you tell me if I pay 10k out of bank is it enough?

Marcon

See https://www.gov.uk/guidance/adjusted-net-income

If you pay £10K to your SIPP, your adjusted net income is reduced by the gross amount (ie including basic rate tax), so will reduce your ANI by £12,500.

DRS1

Don't forget any other taxable income you may have - eg savings interest or dividends.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81936795#Comment_81936795

A relief at source contribution to a SIPP will do three things,

1. Have basic rate tax added to your pension fund (25% of your net contribution).

2. Reduce your adjusted net income by the gross contribution amount.

3. Increase your basic rate band by the gross contribution amount.

It has no impact on your taxable income.

sultan123

https://forums.moneysavingexpert.com/discussion/comment/81937099#Comment_81937099

Thanks will it get me back below 100k?

Marcon

https://forums.moneysavingexpert.com/discussion/comment/81937418#Comment_81937418

Use the link I've given above. There's no point repeatedly asking here - nobody here can answer whether it will get your ANI below £100K because nobody knows if you have other taxable income.

sultan123

https://forums.moneysavingexpert.com/discussion/comment/81937456#Comment_81937456

I do not have any other taxable income. It is literally 112k salary only.