I had a SIPP set up last month. Paid in a lump for last year 23/24 and then started monthly payments in April 2024. I just phoned up HMRC and told them what I was doing and my tax code changed immediately. My only gripe is that I wish I had set one up earlier. The phone waiting time is slightly irritating but it beats filling in a tax return and you benefit throughout the year rather than at the end of it..
Great Video Marta. I’m putting as much as I can into my vanguard SIPP and it was nice to get a 4K tax rebate this year on my self assessment. This goes straight into the following years SIPP. Really helps reduce my tax.
Thank you this is great video, very helpful! i just returned to UK after many years in the Netherlands, driven partly by general life stuff but also huge tax favourabilty in UK towards investing (low income tax, pension tax relief, ISAs, no tax on net assets, low capital gains taxes). Media narrative of UK being high tax is totally untrue compared to other European countries.
Welcome back! Whereabouts in the Netherlands did you live? I agree 100% - as much as I fantasise about living in Holland, I'm not keen on their single citizenship and everything you mentioned.
@@Marta-Lis thank you!! 🙂 I lived in Utrecht, so beautiful, and easy to get to, defo worth a visit! Yes shame about Citizenship, was eligible to become dutch but only if I gave up my UK passport. If you ever need any NL tips let me know!
Hi Martha - I am one of the directors of my company and the company paid a dividend , should I be putting this in my self assessment form? I have also paid into SIPP out of my salary and your video clearly says where I should mention this.
Hi Marta, very helpful video. Thanks. When I log into my HMRC account I could not find the place where I can claim the tax relief for my SIPP though. I am PAYE. I dont know where to go next :(
Great video on an important and poorly understood topic. I'm higher rate tax payer on PAYE, but still not sure if my pension providers over the years have claimed any higher rate tax relief for me. I did a self-assessment return one year and got £x,xxx back. Might be time to look again.
@@Marta-Lis I have had several employers and workplace pensions since then 😉. But called HMRC and went through last 4 years, one employer was using 'relief at source', which qualified me for a higher rate claim . The rest use 'salary sacrifice', so pension paid from gross salary pre-tax= no relief necessary. I love learning new things! Thanks Marta
@@genomicsANDeconomics Tax relief only applicable to private pensions, if you contribute from salary to pension fund provided by employer, then tax at higher rate already reduced at source, salary sacrifice is not your contribution but employer's, your tax has been already reduced as you gave up part of your salary.
How do i find out how much higher tax rate i paid over the last 4 years and back claim? I can only see on Goverment Gateway an estimate of what i will pay this year and nothing on previous years, only total pay (not including taxable benefits)
Great Video keep up the good work. An area that gets overlooked by many. There must millions that hasn't been claimed by people. One question you may be able to help with, if I want to claim back previous years tax relief ( I know you can go back 4 years), can I claim that on my most recent tax return? Or do I need to specify for each financial year, that I never claimed tax relief. Not sure if there is a provision on the tax return form.
Thank you for the video. Assume I am employed and a higher-rated taxpayer. Can I advise my employer that I wish to contribute x% of my income to my SIPP account before they pay my salary each month? This way, I don't have to file a tax claim at the end of the year with hmrc?
Thanks Marta - this is helpful but I'm stuck as I don't complete a personal tax return (I'm employed and pay over into a private SIPP). I have my Vanguard overpayments into a SIPP for the year but once I log onto government gateway I can't find the page you have stated at 10.09 of the video. When I go into completing personal tax return it just keeps saying I don't need to as not earning extra income etc. I feel like I'm missing a step. Any help gratefully received as I keep going round in circles.
So you pay £10k into a SIPP, you get £12500 with 20% relief. Fill out a tax return to get the extra relief (16,667 less 12500 = 4166?) - you get a cheque(?) for the difference. What if you pay that straight into your SIPP again?
nice video. I do have a silly question here: let's say you open a SIPP and alongside your monthly contribution you also add your old workplace pension. a year after I need to claim only the fraction that comes from my earnings ? is it correct?
Very helpful video Marta :) Maybe two questions: 1. The higher-tax payer relief counts towards the 40k allowance for the tax year the contributions were made in, correct? 2. You said you claimed in July. Does that mean you can already claim relief whilst the tax year is still going on (potentially multiples times?) and don't have to wait until it ends? I'm asking because the sooner the relief gets invested likely the better. Thank you!
I'm not Marta, but try to answer, bear in mind you only get a relief on the portion of your income which is taxed at 40%, if your income is £55k as it was in example, the relief you'll get will be on ~£5k of the contributions (difference between higher end of 20% tax band ~£50k and your gross income). The maximum amount you can claim tax relief on is £40k of pension allowance. Tax relief is tax and pension contribution is pension contribution. The year you claim for has finished already, you will be able to invest the full amount in the following year. You file tax return for the let say fiscal year Apr 2021 - Apr 2022 in January 2023, she just filed it earlier.
Great video thanks for sharing Quick question My father is 64 can he open a SIPP put money in it, claim the additional tax rate and start withdrawing from SIPP ? 🤔
Need help to understand exactly when I should submit a ‘self assessment tax return’.. for example: It’s 2023 and I have been contributing to a SIPP, could I submit a claim at the end of the tax year in April 2024? Or do I have to wait till the end of following Tax year to claim higher 40% relief?
Hi @@Marta-Lis Sorry I know this is an old video, but just getting to grips with this. So based on your comments, if you the extra 15% tax relief you get, I was of the opinion this would have to be reinvested as otherwise you are claiming tax relief at a point (in my case anyway) where I am under the age of 55 so cannot claim money from my pension? Could you clarify, apologies if this doesn't make sense.
Question on the 55K dog woman dough analogy. You said £55,000-£50,271 = £4,730 (for rounding) and she will pay 40% tax on this. Doesn't the lady pay 45% tax on this (the £4,730)? Why does she pay 40% when the tax rate on that bracket it 45%? I'm confused (and terrible with money). This is a genuine question.
Also You say to log in to "Gov gateway and look for personal pensions.. it will appear when you complete your tax return" I don't complete a tax return I'm PAYE and also "personal pensions" is not even an option on there. Any pointers are appreciated
I'm retiring early & taking income from my SIPP. When I withdraw from my SIPP they tax me - how do i get that tax back? I only withdraw 12,570 GBP a year & I have a tax code of 1257L, so I shouldn't pay anything. How do I get it back?????
As far as I know you treat it like any income. 1st you take your tax free lump sum, then any income you recieve will be taxed at the going rate i.e 20% on anything above £12570. But the state pension is £10600 that leaves £1970 tax free.
Here's a follow-up video with most frequently asked questions answered: th-cam.com/video/cVJCflIJxfM/w-d-xo.html
I had a SIPP set up last month. Paid in a lump for last year 23/24 and then started monthly payments in April 2024. I just phoned up HMRC and told them what I was doing and my tax code changed immediately. My only gripe is that I wish I had set one up earlier. The phone waiting time is slightly irritating but it beats filling in a tax return and you benefit throughout the year rather than at the end of it..
How does it work? Does the additional tax return will be sent to your SIPP, or it will come to your account?
Great Video Marta. I’m putting as much as I can into my vanguard SIPP and it was nice to get a 4K tax rebate this year on my self assessment. This goes straight into the following years SIPP. Really helps reduce my tax.
Awesome!
Thank you this is great video, very helpful! i just returned to UK after many years in the Netherlands, driven partly by general life stuff but also huge tax favourabilty in UK towards investing (low income tax, pension tax relief, ISAs, no tax on net assets, low capital gains taxes). Media narrative of UK being high tax is totally untrue compared to other European countries.
Welcome back! Whereabouts in the Netherlands did you live? I agree 100% - as much as I fantasise about living in Holland, I'm not keen on their single citizenship and everything you mentioned.
@@Marta-Lis thank you!! 🙂 I lived in Utrecht, so beautiful, and easy to get to, defo worth a visit! Yes shame about Citizenship, was eligible to become dutch but only if I gave up my UK passport. If you ever need any NL tips let me know!
Heard good things about Ultrecht - now confirmed by you, will definitely visit. Thank you, Alistair!
Hi Martha - I am one of the directors of my company and the company paid a dividend , should I be putting this in my self assessment form? I have also paid into SIPP out of my salary and your video clearly says where I should mention this.
Yes, you declare income and dividends are clearly that.
super useful. Let me save a lot. Thx
Thank you for the amazing video! Wonder for the tax refund claimed, would the money be required to pay into the SIPP? Or can stay out?
I answered your question here: th-cam.com/video/cVJCflIJxfM/w-d-xo.html
Hi Marta, very helpful video. Thanks.
When I log into my HMRC account I could not find the place where I can claim the tax relief for my SIPP though. I am PAYE. I dont know where to go next :(
same
Great video on an important and poorly understood topic. I'm higher rate tax payer on PAYE, but still not sure if my pension providers over the years have claimed any higher rate tax relief for me. I did a self-assessment return one year and got £x,xxx back. Might be time to look again.
If you did it once, with the same employer, and were due a refund - well, you have your answer:)
@@Marta-Lis I have had several employers and workplace pensions since then 😉. But called HMRC and went through last 4 years, one employer was using 'relief at source', which qualified me for a higher rate claim . The rest use 'salary sacrifice', so pension paid from gross salary pre-tax= no relief necessary. I love learning new things! Thanks Marta
@@genomicsANDeconomics Boom! Great job!
Pension providers claim basic 20%, you need to claim an additional 20% yourself.
@@genomicsANDeconomics Tax relief only applicable to private pensions, if you contribute from salary to pension fund provided by employer, then tax at higher rate already reduced at source, salary sacrifice is not your contribution but employer's, your tax has been already reduced as you gave up part of your salary.
Hi, my report from my pension provider lists payments from employee and employer. Do I include both when calculating the 20%?
How do i find out how much higher tax rate i paid over the last 4 years and back claim? I can only see on Goverment Gateway an estimate of what i will pay this year and nothing on previous years, only total pay (not including taxable benefits)
Great Video keep up the good work. An area that gets overlooked by many. There must millions that hasn't been claimed by people. One question you may be able to help with, if I want to claim back previous years tax relief ( I know you can go back 4 years), can I claim that on my most recent tax return? Or do I need to specify for each financial year, that I never claimed tax relief. Not sure if there is a provision on the tax return form.
Thank you for the video. Assume I am employed and a higher-rated taxpayer. Can I advise my employer that I wish to contribute x% of my income to my SIPP account before they pay my salary each month? This way, I don't have to file a tax claim at the end of the year with hmrc?
Thanks Marta - this is helpful but I'm stuck as I don't complete a personal tax return (I'm employed and pay over into a private SIPP). I have my Vanguard overpayments into a SIPP for the year but once I log onto government gateway I can't find the page you have stated at 10.09 of the video. When I go into completing personal tax return it just keeps saying I don't need to as not earning extra income etc. I feel like I'm missing a step. Any help gratefully received as I keep going round in circles.
So you pay £10k into a SIPP, you get £12500 with 20% relief. Fill out a tax return to get the extra relief (16,667 less 12500 = 4166?) - you get a cheque(?) for the difference. What if you pay that straight into your SIPP again?
Any answer to this?
Hello, in the self assessment , do I put the total of the money I put into the SIPP or the total plus the percentage added already by HMRC please
I answered your question here: th-cam.com/video/cVJCflIJxfM/w-d-xo.html
nice video. I do have a silly question here: let's say you open a SIPP and alongside your monthly contribution you also add your old workplace pension. a year after I need to claim only the fraction that comes from my earnings ? is it correct?
I answered your question here: th-cam.com/video/cVJCflIJxfM/w-d-xo.html
Very helpful video Marta :)
Maybe two questions:
1. The higher-tax payer relief counts towards the 40k allowance for the tax year the contributions were made in, correct?
2. You said you claimed in July. Does that mean you can already claim relief whilst the tax year is still going on (potentially multiples times?) and don't have to wait until it ends? I'm asking because the sooner the relief gets invested likely the better.
Thank you!
I'm not Marta, but try to answer, bear in mind you only get a relief on the portion of your income which is taxed at 40%, if your income is £55k as it was in example, the relief you'll get will be on ~£5k of the contributions (difference between higher end of 20% tax band ~£50k and your gross income). The maximum amount you can claim tax relief on is £40k of pension allowance. Tax relief is tax and pension contribution is pension contribution. The year you claim for has finished already, you will be able to invest the full amount in the following year. You file tax return for the let say fiscal year Apr 2021 - Apr 2022 in January 2023, she just filed it earlier.
I answered your question here: th-cam.com/video/cVJCflIJxfM/w-d-xo.html
Great video thanks for sharing
Quick question
My father is 64 can he open a SIPP put money in it, claim the additional tax rate and start withdrawing from SIPP ? 🤔
also utilising the 25% SIPP tax free lump sump
I answered your question here: th-cam.com/video/cVJCflIJxfM/w-d-xo.html
Need help to understand exactly when I should submit a ‘self assessment tax return’.. for example: It’s 2023 and I have been contributing to a SIPP, could I submit a claim at the end of the tax year in April 2024? Or do I have to wait till the end of following Tax year to claim higher 40% relief?
You can submit your tax return and claim as early as April 2024, (once the current tax year has completed).
I answered your question here: th-cam.com/video/cVJCflIJxfM/w-d-xo.html
Dear Marta , I open a SIPP account this year , can I Claim sipp allowance for the past 4 years
yeah just pay in 40k and youll auto get the payment from hmrc
I answered your question here: th-cam.com/video/cVJCflIJxfM/w-d-xo.html
Hi, Do they pay the tax return to your bank account or your pension account? Thanks.
Your bank account (specified by you in the self assessment).
Hi @@Marta-Lis Sorry I know this is an old video, but just getting to grips with this. So based on your comments, if you the extra 15% tax relief you get, I was of the opinion this would have to be reinvested as otherwise you are claiming tax relief at a point (in my case anyway) where I am under the age of 55 so cannot claim money from my pension? Could you clarify, apologies if this doesn't make sense.
Question on the 55K dog woman dough analogy. You said £55,000-£50,271 = £4,730 (for rounding) and she will pay 40% tax on this. Doesn't the lady pay 45% tax on this (the £4,730)? Why does she pay 40% when the tax rate on that bracket it 45%? I'm confused (and terrible with money). This is a genuine question.
Also You say to log in to "Gov gateway and look for personal pensions.. it will appear when you complete your tax return"
I don't complete a tax return I'm PAYE and also "personal pensions" is not even an option on there. Any pointers are appreciated
You seem to have very specific questions and I'd love to help. Feel free to books a Strategy Call with me: www.allthehoneys.net/offers/strategy-call
@@Marta-Lis Ah.. I see. Nevermind
£50,270 to £125,140 you pay 40% with the 1st £12570 tax free, the middle £37700 up to £50270 taxed at 20%
Really helpful - thank you
Glad it was helpful!
I'm retiring early & taking income from my SIPP. When I withdraw from my SIPP they tax me - how do i get that tax back? I only withdraw 12,570 GBP a year & I have a tax code of 1257L, so I shouldn't pay anything. How do I get it back?????
Best thing to do is to ask HMRC about it.
As far as I know you treat it like any income. 1st you take your tax free lump sum, then any income you recieve will be taxed at the going rate i.e 20% on anything above £12570. But the state pension is £10600 that leaves £1970 tax free.
👌👌👌