SIPP contribution impact on taxable income

[CarDoodle]

I usually use salary sacrifice for my pension contributions but I've made a small miscalculation and need to reduce my taxable income by a few hundred pounds. I complete a self assessment already so was going to use a SIPP contribution to resolve this.

I've read the guidance and want to check that I have interpreted it right? I am thinking if I want to reduce taxable income by £300 I should contribute £300 * 80% = £240. An extra £60 is then added to the SIPP by HMRC/the provider and any further tax benefit comes through my self assessment.

Second question is whether bank interest counts as taxable income if it's BELOW the saving threshold (£1000 / £500 / £0)? I don't think it does from what I can see as looks like anything below these limits is *0% on previous returns

[thr32]

Morning all,

[quote]I am thinking if I want to reduce taxable income by £300 I should contribute £300 * 80% = £240. An extra £60 is then added to the SIPP by HMRC/the provider and any further tax benefit comes through my self assessment.
[/quote]

That’s right. It’s cash contribution /80% to get to the grossed-up amount (so to get the maximum contribution that non-/low-earners can make each year it’s £2,880/80%=£3,600 gross).

TH