Side hustle money and most tax efficient way to handle it with Sipp and tax

Hi wondering if anyone knows the best way to do this and does it themselves I got paid 10k in freelance and I have a normal paye job I read I could put all this into a sipp and pay no tax on it at all? I’m reading if I put it into a sipp I get a 20% relief though. That brings me to 12.5k in my sipp and I’m entitled to an extra 20% as I’m a higher rate tax payer. Is this right? I made 10k untaxed and now I’m 140% up? Is there a proper way to do this so I pay no tax on this at all while moving toward fire?

Hi

As your self employment income is more than £1000.00, you will need to declare it in a self assessment tax return.  
You will need to register as self employed at Set up as a sole trader: step by step.  
In the tax return you declare your world-wide income and claim personal pension relief by declaring the gross figure paid into your pension pot, including the tax relief claimed by your pension provider.  
This will give you additional tax relief as you are higher rate.

Thank you

It was a one off payment, Do I need to register as a sole trader?

Hi Amy R

Yes, you will and then show an end date against the self employment so that future returns are not issued if not required.

Thank you

I only did 1 job. If i put the end date, you wont predict next years tax bill? However i see if i end up doing a job later then i'll owe interest?

Hi Amy R,
If payments on account are calculated for next year and your self employment has ceased, you can reduce the payment on account to £0.00 before you submit your tax return.
If you have reduced your payments on account and you realise that this amendment is too low, you should pay the amount you feel the payment on account should be.
Thank you. 


 

Right now ive done no extra work, maybe i'll do some in feb next year. I don't want to reduce to 0 and then get work in feb and i have interest to pay. Is this the case?