Another SIPP Question

[Jambo85]

Suppose I'm a higher rate tax payer and I put some cash in a SIPP.

SIPP company obtains the 20% relief and adds that to my SIPP eventually.

I claim back the other 20% relief via my tax return.

Having never completed a tax return before I don't know what form this refund takes! Is it drip fed back to me over the next tax year through reduced PAYE or do I get a cheque?

Thanks!

[bogie]

You do your tax return online.You put in your earnings and benefits from P60/P11D for the year, and your pension contributions into all the schemes you have in place.

It calculates how much is owed to you at the end. You tick a box to say "give me it now" or "put my tax code up next year"

Usually the refund is in your bank the same week. I do the return on a weekend and by the following Friday money is in the bank

[Jambo85]

Tremendous, thanks.

[bogie]

If your pension contributions are static e.g. same amount each month for years then HMRC may not require a tax return from you (unless there is other reason to)

They just calculate it and put it in your tax code going forwards, so you effectively pay less tax each month.

No point in having the hassle of doing a return if you dont need to.

If you pay/benefits and pension contributions are variable then of course you need to do a return and sort it out accurately each year.

[Cabbage Patch]

Not sure you necessarilly need to fill out a tax return.

I call the tax office once a year in April or May and advise the total gross pension contribution across my company pension and SIPP for the previous year. I also estimate my contributions for the current tax year. This is just an estimate as I have quarterly bonus payments and make ad-hoc contributions to the SIPP, but the call next April / May will confirm the figure. The tax code is then adjusted.