Skip to main content

This is a new service – your feedback will help us to improve it.

Posted Thu, 15 Feb 2024 11:48:09 GMT by
I am working as an employee on PAYE with a company pension. I'm paying tax at the 40% rate. If I increase my company pension contributions, my taxable income reduces so that I'm no longer a 'higher rate taxpayer', and can then access higher savings tax thresholds ( £1000 instead of £500), and the Marriage allowance. If, instead, I pay into a private pension SIPP, I have to wait until the end of the tax year to claim these contributions back. Why would it make any difference to accessing the lower rates of savings etc, if I did this as opposed to using the Company pension scheme ? I would be contributing the same in both cases. Thanks
Posted Tue, 20 Feb 2024 10:55:21 GMT by HMRC Admin 5

Payments made to private pensions can be added to your tax code, in-year.
To update your code with any such payments made, contact us by webchat or phone via Income Tax: general enquiries 

Thank you
Posted Wed, 21 Feb 2024 14:36:41 GMT by
Thanks, I will give this a try the next time I make a contribution; I did read that any amount over £10000 will need documentary evidence sending in writing, cheers,
Posted Sat, 24 Feb 2024 12:14:28 GMT by jacw001
I am in a similar case where I am just £1000 over the earning threshold to be a higher rate tax payer. To qualify to marriage allowance, I am planning to increase my SIPP pension contribution in this tax period to increase my basic rate limit so I remain as a basic rate payer. On this basis, a net contribution of £800 will be enough. Given I have received over £600 in interest, even though there is an allowance for £1000 tax free interest, would that £600 be added to my Total Income on which tax is due? If so, I will need to increase my SIPP by another £480 to be treated fairly as a basic rate tax payer. It would be great if HMRC could advise so I can plan accordingly
Posted Wed, 28 Feb 2024 07:19:16 GMT by HMRC Admin 25
Hi jacw001,
Your adjusted net income includes any untaxed interest from savings and dividends.
Additonal savings allowances, including the Personal Savings Allowance and the Starting Rate for Savings, are not applied to this untaxed interest before it is added to your adjusted net income.
Thank you. 
Posted Sat, 30 Mar 2024 08:58:28 GMT by jacw001
Thanks for the clarification. After my SIPP contribution, I am a basic rate payer which do not pay the 40% tax. However, I am still due the HICBC charge in 2023/24 as my adjusted net income exceed the £50k threshold. On this basic, would I still receive the Marriage Allowance as my wife is houseperson looking after our baby?
Posted Mon, 08 Apr 2024 13:55:06 GMT by HMRC Admin 5
Hi jacw001

If you are not a higher rate taxpayer and your partners income allows the marriage transfer then yes this can be claimed.

Thank you

You must be signed in to post in this forum.