Hi,
Simple question:
I earn £52k per year and I want to contribute into a SIPP. I want to do this so that I can claim back all of the tax that falls into the 40% bracket on the end of year tax return.
Assume no other income or allowances, how much should I pay into my SIPP?
Replies (13)
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A bit harsh
employ an accountant
Would you take on a client who only wanted to know the answer to this question?
Look up the personal allowance and the basic rate band. Add those two figures together. The result of that calculation is the amount your gross income must not exceed if you do not want to pay tax at 40% on any of your income.
Not simple at all
John is right - but why would you say assume no allowances? Income of £52k isn't high enough to lose them.
Plus you have annual limits on premiums, with extras brought forward, employee / employer premiums as different rules apply, salary sacrifice etc etc
I would have thought your first steps should be to talk to an IFA to see what the new rules would mean for you and what kind of policy best suits your circumstances before talking about how much could be put in.
I read "other" as applying to
I read "other" as applying to both "income" and "allowances".
If you earn £52k
And all you want to do is claim back the 40%, the payment would be;
Personal Allowance = £10,000
Basic Rate Tax - £31,865
£41,865
£52,000 - £41,865 = £10,135
Payment of £8,108 to SIPP. They add on 20% tax to gross up, you claim the additional 20% tax (£2,027) through your tax return.
out of little acorns
do mighty oaks grow. So probably for a reasonable fee. I don't think I am being harsh - we have all spent years studying and learning our chosen profession - why should we give away our hard earned intellectual property for free
How much would you charge
To perform the calculation Joe has done above?
Don't get me wrong, I am with you generally on your outlook but I think some advice on something as quick and simple as this could be give without too many problems.
I agree
To perform the calculation Joe has done above?
Don't get me wrong, I am with you generally on your outlook but I think some advice on something as quick and simple as this could be give without too many problems.
I agree, hence my response. This generally is a helpful community here though.
@JCresswell Tax
The major issue I have is that in my experience such so called 'simple' questions are not. A little bit of digging usually throws up something more complex than the Op, in this case, would ever envisage.
Agree with JC, members on here kindly give help and advice but on the face of it this seems like a pretty simple question, so why kick up a fuss.