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  • FIRST POST
    • zolablue25
    • By zolablue25 12th Apr 18, 5:10 PM
    • 1,582Posts
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    zolablue25
    How much can i pay into a SIPP?
    • #1
    • 12th Apr 18, 5:10 PM
    How much can i pay into a SIPP? 12th Apr 18 at 5:10 PM
    If I wanted to pay a lump sum from my savings how much would I be allowed to pay in to a SIPP and still get a tax benefit from all of the payment?

    If I earn 30K is the limit I can pay:

    30K-Personal Tax allowance-company pension payments?

    Thanks
Page 1
    • Dazed and confused
    • By Dazed and confused 12th Apr 18, 5:22 PM
    • 2,479 Posts
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    Dazed and confused
    • #2
    • 12th Apr 18, 5:22 PM
    • #2
    • 12th Apr 18, 5:22 PM
    Potentially 30k (you paying 24,000 and the SIPP provider adding 6,000 basic rate tax relief).

    Is the 30k your taxable wage i.e. P60 value?

    Do you pay into a pension with your employer?
    • MallyGirl
    • By MallyGirl 12th Apr 18, 5:23 PM
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    MallyGirl
    • #3
    • 12th Apr 18, 5:23 PM
    • #3
    • 12th Apr 18, 5:23 PM
    tax allowance doesn't come into it. If you earn 30k then 30k can go into pension regardless of the fact that you didn't pay tax on 11.5k of it. some of that from you and some in tax relief
    it applies across all pensions combined.
    Last edited by MallyGirl; 12-04-2018 at 6:17 PM. Reason: incorrect info
    • zolablue25
    • By zolablue25 12th Apr 18, 5:42 PM
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    zolablue25
    • #4
    • 12th Apr 18, 5:42 PM
    • #4
    • 12th Apr 18, 5:42 PM
    Yes I pay into a company pension scheme. Its a basic one whereby I pay the minimum amount required for a workplace pension (3%) and my company pays the minimum they need to plus 1% (so, also currently 3%). And, yes, the 30k is my P60 total

    So, in the example given, I can pay 24K minus my and my employers contributions to a company pension approx 1800 (if my maths is right). So I could pay a sum of 22200 and the SIPP provide would add 4400?

    MallyGirl, are you saying the same thing, but in a different way? i.e. the total in would be 30K or I can pay 30K and get 20% on top of that (excluding the company pension for simplicity)?

    Edit: My maths isn't right is it. I need to work backwards from 30K. So take the 1800 off the 30 leaving 28,200. This would be the total I could pay in when you add on the 20% so 23500?
    Last edited by zolablue25; 12-04-2018 at 5:45 PM.
    • Linton
    • By Linton 12th Apr 18, 6:02 PM
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    Linton
    • #5
    • 12th Apr 18, 6:02 PM
    • #5
    • 12th Apr 18, 6:02 PM
    Your employers contribution isnt included in the 30k. So you can contribute 30k- your contribution to your employers scheme. You do that by actually paying 80% of the amount into the SIPP. HMRC will add the missing 20%.
    • zolablue25
    • By zolablue25 12th Apr 18, 6:12 PM
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    zolablue25
    • #6
    • 12th Apr 18, 6:12 PM
    • #6
    • 12th Apr 18, 6:12 PM
    Your employers contribution isnt included in the 30k. So you can contribute 30k- your contribution to your employers scheme. You do that by actually paying 80% of the amount into the SIPP. HMRC will add the missing 20%.
    Originally posted by Linton
    Great thanks.

    So, 30,000 - 900 = 29100 total

    So my contribution would be (29100/120)*100 = 24,250
    HMRC contribution = 4850

    Got it. Thanks

    Ah, just one more thing (I think I watched too much Columbo as a kid). Can I pay in one lump at any time during the year or must it be at year end or in monthly installments?
    • Dazed and confused
    • By Dazed and confused 12th Apr 18, 6:13 PM
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    Dazed and confused
    • #7
    • 12th Apr 18, 6:13 PM
    • #7
    • 12th Apr 18, 6:13 PM
    If you aren't a higher rate payer then a SIPP contribution doesn't normally save you any income tax (you get the basic rate tax relief added to your pension fund but it doesn't affect your own tax liability) but if you are resident in Scotland for tax purposes and earning the amount you are referring to then you get a little bonus in 2018/19

    https://www.gov.uk/government/publications/pension-schemes-relief-at-source-for-scottish-income-tax-newsletter-february-2018/pension-schemes-relief-at-source-for-scottish-income-tax-newsletter-february-2018
    • Dazed and confused
    • By Dazed and confused 12th Apr 18, 6:15 PM
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    Dazed and confused
    • #8
    • 12th Apr 18, 6:15 PM
    • #8
    • 12th Apr 18, 6:15 PM
    So my contribution would be (29100/120)*100 = 24,250
    HMRC contribution = 4850


    No, if you are contributing 29,100 then you pay 23,280 and the pension provider adds 5,820 basic rate tax relief. I think you have got confused with the 20% tax relief at source amount.
    • zolablue25
    • By zolablue25 12th Apr 18, 6:31 PM
    • 1,582 Posts
    • 462 Thanks
    zolablue25
    • #9
    • 12th Apr 18, 6:31 PM
    • #9
    • 12th Apr 18, 6:31 PM
    So my contribution would be (29100/120)*100 = 24,250
    HMRC contribution = 4850


    No, if you are contributing 29,100 then you pay 23,280 and the pension provider adds 5,820 basic rate tax relief. I think you have got confused with the 20% tax relief at source amount.
    Originally posted by Dazed and confused
    I certainly have! Didn't realise there was a difference, despite being told in a previous thread about it! (it didn't sink in)

    Got it now, thanks
    Last edited by zolablue25; 12-04-2018 at 6:34 PM.
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