SIPP HMRC Tax Element Timing of Payment

[JMN2]

This is what I received from Barclays/AJ Bell in mid November:

"For member contributions, the Basic Rate tax element will be reclaimed from Her Majesty’s Revenue & Customs and credited to your SIPP cash account on or before 25 January."

Am I correct in assuming that HMRC might pay very quickly but money would be hoarded by the broker to earn them interest? Is that common practise?

[swill453]

Am I correct in assuming that HMRC might pay very quickly but money would be hoarded by the broker to earn them interest? Is that common practise?

In a word, no.

When sipptechie used to post in the "old place", I kept a bookmark to one of his useful ones http://boards.fool.co.uk/the-tax-reclaim-cycle-will-work-as-follows-12899724.aspx

"Contribution received by your SIPP administrator between 6 September and 5 October.
They will submit the reclaim to HMRC on or before 31 October.
Tax reclaim received by them and credited to your SIPP around 21 - 25 November"

Replace the months with Nov/Dec/Jan and you'll see your broker's statement matches the above timetable.

Scott.

[JMN2]

Thanks Scott. Looks then that I won't be topping up any positions before year end.

[JMN2]

Seems that I made a contribution on 4 May 2004 and HMRC paid on top on 21 June 2004.

Also on 24 November 2006 versus 22 January 2007, which are almost identical dates.

[swill453]

Last couple of years I made the minimal £2880 contribution on the 6th April, but it seems that misses the early April cut-off, so the tax relief doesn't get credited until 22nd June.

Scott.

[melonfool]

Seems that I made a contribution on 4 May 2004 and HMRC paid on top on 21 June 2004.

Also on 24 November 2006 versus 22 January 2007, which are almost identical dates.

AJ Bell here too - made a payment 2nd Feb, HMRC payment 22 March

Another payment 19th Feb, HMRC payment 22nd April.

Mel

[JMN2]

...

"For member contributions, the Basic Rate tax element will be reclaimed from Her Majesty’s Revenue & Customs and credited to your SIPP cash account on or before 25 January."

...

Barclays is showing nothing yet, perhaps this will be paid similarly to dividends. Late.