Amy R

Ok worked it out! I underpaid tax for the previous tax year which is throwing the numbers off. a mistake from my old accountant. So best way is to put 80% in to you sipp get 20% uplift. Then do a tax return and use the other 20% I didnt put in to pay the tax. Will have full amount from freelance in the sipp and 0% tax overall apart from paying ni. Which cant be avoided. Other option is to ss on paye job down the amount of freelance to save on ni. Then pay tax on the freelance. Will actually save more but require a bit more work and not all jobs offer ss

Hmm what you say is what id expect! But its not seeming to work that way when i do my self assessment though. Here are the actual numbers I made £58,772 through paye and my tax paid was £9,793.20 I made £15910 sole trader The self asssessment is adding these two numbers together to make £74,682 then its taking away the tax free allowence of £12,570 from that to give a taxable amount of £62,112 I put £15910 from my freelance into a sipp and i have £19,887 in my sipp So looking at the next calculations. Its adjusting Basic tax rate which is normally £37700 (£50270 - £12570) by how much i put into my sipp (£19887) . So £37700 + £19887. Adding upto £57587 . So now its trying to work out tax on this at 20% and the rest over at 40%. So £62,112 - £57587 = £4525. So its £57587 at 20% tax and £4525 at 40% tax The tax due is £11517.40 at 20% and £1,810 at 40%. in total i owe £13,327.40 in tax The self assessment then takes of the tax i've already paid in my paye job and add Ni which is (£13,327.40 - £9,793.20) + £156.50 This results in a tax bill of £3,690.70 This really doesn't make sense to me as my main job is already handled. I made £58,772 through paye and my tax paid was £9,793.20 So all that is left to tax is the £15910. But i put that all into a sipp so in my sipp i have £19,887. I should owe hmrc £3977 thats not even including Ni. Which is lower than the £3,690.70 that self assessment is saying i owe. So if i do this again just putting 80% into my sipp as ejc7691 suggests. Self assessment says my tax bill is higher! I made £58,772 through paye and my tax paid was £9,793.20 I made £15910 sole trader The self asssessment is adding these two numbers together to make £74,682 then its taking away the tax free allowence of £12,570 from that to give a taxable amount of £62,112 I put £12728 (80% of £15910) from my freelance into a sipp and i have £15910 in my sipp So looking at the next calculations. Its adjusting Basic tax rate which is normally £37700 (£50270 - £12570) by how much i put into my sipp (£15910) . So £37700 + £15910. Adding upto £53610 . So now its trying to work out tax on this at 20% and the rest over at 40%. So £62,112 - £53610 = £8502. So its £53610 at 20% tax and £8502 at 40% tax The tax due is £10722 at 20% and £3400.8 at 40%. in total i owe £14122.8 in tax The self assessment then takes of the tax i've already paid in my paye job and add Ni which is (£14122.8 - £9,793.20) + £156.50 This results in a tax bill of £4,486.10 So as you can see its hard to work out what to do!

Ok thanks!

Ok make sense! Thank you!

Right now ive done no extra work, maybe i'll do some in feb next year. I don't want to reduce to 0 and then get work in feb and i have interest to pay. Is this the case?

Hmm, tough when trying to pay your taxes and it made quiet difficult to work anything out properly

Hi HMRC Admin 21, Im super confused now. Can you clairfy this? I have a paye job making 58k. This is taxed already in my pay check. I made 15k as a sole trader and put this full 15k into my sipp. I need to call HMRC to do declare this? I can't just do a self assessement?

I only did 1 job. If i put the end date, you wont predict next years tax bill? However i see if i end up doing a job later then i'll owe interest?

Do you have any recommendations?

Hi wondering if anyone can help me. I’m never finding any clear answers on the internet and I’ve even spoke to a few accountants who also couldn’t help or didn’t understand my goal here. Basically I have a full time job where I am in the 40% tax bracket. I did a one off job for a friends company where I was paid 15k. This is of course untaxed Im looking for the most tax efficient way to handle this money, if I I was just taking it I’d loose 40% as tax. Reading id also have to pay ni of class 2 and 4. Is this right? I was also reading I can put 15k into my sipp. So save 100% tax? But then I’d end up with 25% topped up automatically, I’d owe this 25% back? Also reading I could put 80% of this 15k into a sipp and I’d end up with the 25% top up so I’d have the full 15k in my sipp. I’d also have 25% left in cash to pay back the tax they topped me up by. Really not sure how to proceed. I tried to do a self assessment on hmrc website emulating this. If I put the whole 15k in I’d assume my bill would be ni plus the 25% top up they gave me. I would have put all the 15k into the sipp so I’d have to use money from my paye job to cover the 25% top up. The bill I’m given is less that this 25% top up though. So I’m confused with the maths If I put 80% of the 15k into my sipp. It gets a 25% top up. Meaning I’d have the full 15k in my sipp. My thinking is with the 20% left over I can use this to pay my tax bill plus ni. However my tax bill is even higher than if i put my whole amount of the 15k in to the sipp. None of the numbers make sense. Ideally I’d just get my paye income and the side hustle income just goes into my sipp with no tax at all. Am I mis understanding my options here?