Pensions - HRT & Tax codes
Discussion
Hello all, does anyone here have experience of this?
Salary of £55,270. Only income source. This means £5,000 of the salary is subject to Higher Rate Tax, based on a full personal allowance of £12,570 being available. Therefore, to reclaim the full tax relief available via a pension contribution it would be a £4k payment, £1k added via the SIPP administrator and then a further £1k of tax relief adjusted via tax code or self-assessment. All makes sense so far.
HOWEVER, what if the person's tax code for employment during 21/22 was not the normal 1257L, but instead 1157L? An extra £1,000 is subject to HRT so to claim the full HRT relief available would it be a £4,800 contribution, £1,200 reclaimed via SIPP administrator and then a further £1,200 via tax code/SA?
Salary of £55,270. Only income source. This means £5,000 of the salary is subject to Higher Rate Tax, based on a full personal allowance of £12,570 being available. Therefore, to reclaim the full tax relief available via a pension contribution it would be a £4k payment, £1k added via the SIPP administrator and then a further £1k of tax relief adjusted via tax code or self-assessment. All makes sense so far.
HOWEVER, what if the person's tax code for employment during 21/22 was not the normal 1257L, but instead 1157L? An extra £1,000 is subject to HRT so to claim the full HRT relief available would it be a £4,800 contribution, £1,200 reclaimed via SIPP administrator and then a further £1,200 via tax code/SA?
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