Sidharth

Hi, I'm completing my Self Assessment as I have paid into a SIPP. I have paid the correct tax for 2023-2024 based off my income but when I provide the SIPP amount (£6375 after adding the relief at source - my contribution was £5000) then my Self Assessment calculation says that I owe another £360 tax! It seems the £6375 is added to the basic rate bracket at 20% and my salary at the higher rate (40%) goes down by that amount. I was under the impression my amount of taxable income would go down by the SIPP amount so I should save moey rather than pay more tax! Have I misunderstood or have I done something wrong?

Hi, I have gross annual income of £120000 and I have given the correct amount of tax during the year through PAYE. I also contributed £5100 into my SIPP during the year, which I believe relates to £6375 with government contribution so I completed a self assessment form and it says that I need to give £300~ more tax. I thought the £6375 would be deducted from 120000 but apparently it's added to the allowed allowance in the 20% pay bracket and thus reducing the amount in the 40% bracket and all in all it has meant I'm supposed to give more tax. Seems wrong that I'm supposed to give more tax if I've put in money in Pension!