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Posted Tue, 12 Dec 2023 22:44:18 GMT by cicciobello
Self Assessment: entering Vanguard SIPP contributions Hello! I'm a basic rate tax payer completing my tax return. I have entered my details in the Self Assessment, here's the final calculation: |Description|Amount| |:-|:-| |Pay from all employments|£48,856.00| |Plus benefits and expenses received|£44.00| |**Total from all employments**|£48,900.00| |Profit from self-employment\*|£690.00| |Interest from UK banks, building societies, and securities|£15.00| |Dividends from UK companies|£173.00| |**Total income received**|£49,778.00| |Minus Personal Allowance|£12,570.00| |**Total income on which tax is due**|£37,208.00| \* Profit from self-employment is £1690 - £1000 trading allowance I have entered my Vanguard SIPP contributions (+ tax relief received) in both of these sections (£2,875.00): * Payments to registered pension schemes (also known as PPR) where basic rate tax relief will be claimed by your pension provider (called 'relief at source'). Enter the payments and basic rate tax * Total of any 'one-off' payments to registered pension schemes included in the 'Payments to registered pension schemes where basic rate tax relief will be claimed by your pension provider' box I have a few questions: 1. Is it correct to put the SIPP contributions in both sections? I am struggling to understand what they mean to be honest. And in the calculations page I see this line: "Your basic rate limit has been increased by £2,875.00 to £40,575.00 for pension payments." Is this correct? I thought SIPP contributions for basic rate tax payers would not change anything in the tax calculations as I already got the maximum tax relief I could receive for them (20%)... 2. Why are my dividends and income from savings accounts included in the calculations? Isn't there a £2,000 dividend allowance and a £1000 Personal Savings Allowance for basic rate tax payers? Thanks for helping me understand this!
Posted Tue, 19 Dec 2023 10:47:13 GMT by HMRC Admin 5
Hi cicciobello

Box 1 on page TR4 of SA100, relates to payments made to a pension scheme, where basic rate tax relief will be claimed by the pension provider.  
An entry in this box, will increase the basic rate band, so that more income is taxed at 20% and less at 40%.  
This has the effect of reducing income that would have been taxed at 40%, down to 20% and in doing so, gives a further 20% tax relief.  
Box 2 should only be used where no tax relief is given and none claimed by the pension provider.  
You should not fill in both boxes in relation to the same pension scheme.

Thank you
Posted Tue, 19 Dec 2023 11:12:08 GMT by cicciobello
Thank you for your reply! Ok, it is clear that I should not fill in Box 2, but what about Box 1? It is still unclear if I should fill that one. My SIPP provider has already claimed tax relief on my contributions. Thanks
Posted Fri, 22 Dec 2023 14:20:51 GMT by HMRC Admin 5
Hi cicciobello

If your pension provider claims 20% tax relief on your SIPP payments, you would enter the amount paid into the SIPP in box 1.  
This allows for the 20% tax bracket to be extended, which reduces the amount of income taxed at the higher or additional rate of tax.

Thank you

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