If I have a sipp and I am unemployed and I overcontribute to it, will i have to pay tax on the

If I have a sipp and I am unemployed and I overcontribute to it, will i have to pay tax on the sum i have overpaid?

Not HMRC...Yes, you can only pay in up to the amount of earnings in anyone year, other than £2880 net (£3600 gross) to a stakeholder plan. You need to talk to your SIPP provider as they will have given tax relief at source you arent entitled to.

Hi DOGSTAR TROW,
You will need to declare a pension savings tax charge in a self assessment tax return (SA100 and SA101 boxes 9 and 10 on page Ai4 (Additional information (2025)) , if your payments in to pension schemes exceed your UK earned income for the tax year.  
If you have no earned income in the tax year then the maximum you can pay in tax free is £2880.  
You enter the amount paid in excess of your payment threshhold.
Thank you.

Thank you for responding to my question. Can you tell me whether it is seen as ILLEGAL to do what I have done by accident - will I be fined? If it is not seen as ILLEGAL how much can I put into my SIPP (above the £2880 maximum)? I am fully willing to pay tax on the amount above the threshold as I am close to retiring (less than 5 years) and want to put as much money into my pension as possible. I DO NOT WISH TO BREAK ANY LAWS. Kind regards,

Hi DOGSTAR TROW,
It is not illegal.
If you pay in more though you will need to repay the tax relief.
You will need to advise the pension company of this.
Thank you.

 

One or two final questions to completely clarify things. What is the limit I am allowed to pay into my SIPP per tax year? Yes, the first GBP2880 I will receive tax relief for but I am quite willing to repay the tax relief on ALL monies paid into my SIPP above this amount eg If I paid GBP6880 into my SIPP this tax year on the initial GBP2880 I would receive GBP720 as tax relief from HMRC BUT I would have to repay GBP1000 to HMRC on the GBP4000. Is the amount I could theoretically pay into my SIPP unlimited? GBP50,000 per tax year? I don't have any incomings other than my benefits (I am severely disabled) so I don't have much I can add to my SIPP maybe GBP4000 through sale of jewelry but I would like to know "where the line is drawn". I will retire in under 5 years and wish to add as much to my SIPP as possible. Thank you for your help in answering all my questions, I don't want to do the wrong thing and don't know much about tax or SIPP's.

Hi ,
 

While there is no limit to the amount you can pay into your SIPP, there is a limit to the amount paid into the pension scheme that qualifies for tax relief.  This is based on your relevant UK earnings.  PTM051100 give guidance on how this allowance is calculated.  See : PTM051100 - Annual allowance: essential principles  .  Please also have a look at the guidance at : Tax on your private pension contributions   . Thank you .