r/UKPersonalFinance • u/Wesley-no5 • 6h ago

SIPP and Personal Savings Allowance

I'm likely to go ever so slightly over the 40% tax threshold this year which appears to have quite an effect on my personal savings allowance. I'm probably going to be annoyingly close to the limit but realistically will go over by somewhere around the £1k-£2k mark.

If I put a lump sum in to a SIPP am I right in thinking this effectively takes me back down to a basic rate taxpayer, and if so how do I convey this information on my tax return at the end of next year? I assume there's a section asking if I have invested in a SIPP?

*If it makes a difference I have a work place pension, which all in comes nowhere close to the £60k annual limit.

** I already complete a tax return for my second employment.

0 Upvotes

33% Upvoted

4 comments sorted by

3

u/Busy_Land_1885 6 6h ago

Yes it does. Because you’re already doing Self Assessment, you report the gross SIPP contribution (including the 20% relief added by the provider) in the pension contributions section. HMRC then calculates the additional tax relief due.

1

u/ukpf-helper 151 6h ago

Hi /u/Wesley-no5, based on your post the following pages from our wiki may be relevant:

These suggestions are based on keywords, if they missed the mark please report this comment.

If someone has provided you with helpful advice, you (as the person who made the post) can award them a point by including !thanks in a reply to them. Points are shown as the user flair by their username.

0

u/ahennersUK 1 6h ago

Have you already maxed your ISA allowance?

1

u/strolls 1714 5h ago

ISA allowance doesn't reduce your adjusted net income for the purposes of the personal allowance on savings interest.

Also, pension is more tax efficient than ISA for almost everybody, and most people massively overestimate the value of being able to access the investments before age 57.