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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3816
Experience:  FCCA FCMA CGMA ACIS
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I wanted to bring you up to date on where things ended up and

Customer Question

I wanted to bring you up to date on where things ended up and to confirm the money I need to put into the SIPP today. I eventually received £100k from my ex-employers but they withheld tax at the full amount (personal allowance = zero) so I received £66,357.
I recently received a payment from an ex employer of £100k. In order to maximise my earnings from this amount I will deposit the fully taxed £66,357 into my SIPP and then I wish to receive the amount of tax withheld back again as soon as possible.
How does this work exactly?
Is there no way to get HMRC to reimburse the tax which was just paid to them immediately by explaining that the SIPP contribution should not have been taxed?
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and happy to be able to assist you with your question. Your final payment appears to have been incorrectly taxed. The first 30K of such payments are tax free leaving 70K exposed to tax. There are limits to SIPP contributions. In the 15/16 tax year the maximum is 40K. in 14/15, 40K, the tax year before 50K, the one before that 50K. You can go back to mop up unused contribution levels. Remember that employers' contributions to your pension fund count as part of the permitted maximum. You do, of course, make such contributions net of tax relief and theave it to the SIPP provider to collect the balance from HMRC. You can ask your tax office for an interim refund of the over deduction of tax or wait until the end of the tax year and do it through your annual self assessment tax return. I do hope my reply has been of assistance.
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Expert:  bigduckontax replied 1 year ago.
Amendment: paragraph 3, line 3; delete 'theave,' insert 'leave'.
Thank you for your support.

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