SIPP Pension Tax Relief

I opened a SIPP with ii and have deposited £33,000. I expected them to add £6,600 tax relief but they added £8,250. I have asked them several times and the reply with this same response each time. Everywhere else I have checked (plus online calculators) works out tax as 20% of my contribution. Here is their calculation: “You made a £20,000 net contribution by debit card on the 2nd April and a £13,000 net contribution by debit card on the 5th April. This resulted in a tax relief of £8,250 received for the contribution made in the tax year 23/24. Although the tax relief of £8,250 was received and applied to your account on the 22nd May 2024 this amount relates to the tax year 23/24 as they are linked to the original net contribution that was made. Thus, I can confirm that with ii you have made a net contribution of £33,000 and received £8,250 tax relief for the tax year 23/24” Is this correct?

Hi macleda,
Yes.  (£33000/80*100 = £41250).  £41250 - £33000 = £8250.  You deposited 80% of the amount paid into your pension pot (£33000).  The pension provider claimed 20% from HMRC (£8250), to increase your gross payment into your pension pot (£41250).
Thank you.

Wow! I'm glad to be corrected. A good result. Thanks.

I live in Scotland and I am higher rate tax payer (42%). Can you advise do I claim an additional 22% via self-assessment and what would be the calculation based on the £33,000 in 2023/2024? Is it as per initial 20% calculation as above (£33000/78*100 = £42307). £42307 - £33000 = £9307. Or something else?

Hi HMRC - please ignore above. I did some checking online and now understand the amount of higher tax relief depends on how much was paid above £50,270. I checked my P60 and it states £62,544.42 of which £15,403.58 was paid in tax. The gross pay is lesser than I expected but this will be due to paid AVCs into non-contributory workplace pension of £1,410 per month, and £150 per month for share match scheme. I think these deductions are before tax. For the 2023/24 tax relief is the calculation £62,544 - £50,270 = £12,274 x 22% relief = £2,700. Can you please confirm on above and correct as required. Thank you,

Hi ,
 

On the tailor your tax return section online you would answer yes to the question- Did you make contributions towards a personal pension or retirement annuity? This will open the section to declare the pension contribution made to receive the tax relief. On the calculation, if you pay tax at the 42% tax bracket, the tax bands will be adjusted to give you the tax relief due.

Thank you .

Thanks. I am undecided if I will complete a tax return rather write to HMRC, hence why I asked for confirmation on the calculation. Can you confirm on calculation noted above please?

Hi,
The £50270 is the threshold for higher rate tax if not in Scotland.
The scotttish rates can be found at Income Tax in Scotland .
Detail of claiming pension relief at Tax on your private pension contributions
Thank you.

Hi macledam
If you live in Scotalnd then the calculation woud not be correct. You can check on the Scottish rates at: Income Tax in Scotland. You can also contact HMRC to review: Self Assessment: general enquiries,
Thank you.