Are there any income tax/ SA experts on here?

[Arnoldthecat]

I just have a query about pensions and TR

I'll try and help

ok thanks,,
Here is an example. A person has PAYE income which is just below the higher rate tax band. They have other income which when all added up with PAYE brings their gross income a good way into the HR band.

One strategy to lower tax is to pay into a SIPP. Paying into a SIPP gives you an automatic 20% tax credit via the SIPP provider.

The gross SIPP contribution is also declared on the SA and this has the effect of raising your 20% lower rate band which in effect is the means by which the HMRC give you your extra 20% tax credit for being a higher rate taxpayer,,this bit is correct right ??

So maybe you just want to pay just enough into a SIPP so that your total tax is just within the lower rate bracket in total on our SA.

How can you work out this "ideal" gross amount??

Thanks

bump...

This may be a resurrection of a three-week old thread, but I may have the answer to this if you’re still trying to work this out. I’ve just been through this myself.

Also, if you’ve since spoken to a professional pensions advisor, I’d be interested in their answer.