Simple question about the personal tax documents

[TheMotorcycleBoy]

Hi all,

In addition to mine and Mel's ISAs we thinking of opening a SIPP. I am of the view that to benefit most profitably from this, I will need to start to file annual personal tax returns, in order to reclaim my HR tax.

Before I do this, I want to get up to date with all my tax documentation. Now I've not actually seen a P60 for years, I imagine this being the name of one the tax documents I'll need to start to pay attention to, since my employer merely emails us with a link to an electronic copy, and I typically ignore the mail.

I believe that my employer will hold a couple of years worth of my P?? forms back, but before I start to make any enquiries could somebody please remind me of the names of the items I need to request please?

Would they be the P60 and the P11 documents?

thanks
Matt

[PhaseThree]

It really depends on where your income scomes from. As a simple employee under PAYE you will need :-
P60 :- Tax paid on salery in previous tax year
P11D :- Benifi in kind payements (company car, loans etc)

You may also need records of other income streams (Bank interest, Dividends etc) if these are above the current allowances.

[Alaric]

Would they be the P60 and the P11 documents?

P60 is the statement of what your employer paid you in cash and how much tax was deducted at source.

P11D is the statement of benefits in kind. That covers things like Company Cars, Health Insurance and other perks deemed taxable.

I believe it's mandatory to provide them, perhaps no longer in paper form.

[PinkDalek]

Hi all,

In addition to mine and Mel's ISAs we thinking of opening a SIPP. I am of the view that to benefit most profitably from this, I will need to start to file annual personal tax returns, in order to reclaim my HR tax. ...

You've had answers on P60s etc but I'm not certain you definitely need to submit an Income Tax return, depending on your circumstances, to claim Higher Rate relief.

https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief includes:

Claim tax relief in England, Wales or Northern Ireland

You can claim additional tax relief on your Self Assessment tax return for money you put into a private pension of:

20% up to the amount of any income you have paid 40% tax on
25% up to the amount of any income you have paid 45% tax on

You can also call or write to HMRC to claim if you pay Income Tax at 40%.

If you call or write they may insist you fill in a return (I don't know) but it may be they merely adjust your tax coding to grant higher rate relief. Looking further, Hargreaves Lansdown have a sample letter linked to from here https://www.hl.co.uk/help/sipp,-drawdown-and-annuity/sipp/tax-relief/how-do-i-claim-higher-rate-tax-relief.

[chris]

Hi Motorcycle boy

I pay into a pension and also have gift aid payments and am a 40% tax payer and director (I say that because directors very often have to submit returns). I just write to the HMRC each year with a breakdown and they do not require me to fill in a tax return, so you may get away with it if you just write. If you phone, the person on the line may think that it is easier for him just to mark you as needing a tax return rather than take all the details, so it's worth a try.

They will want the year-end certificate from your SIPP, showing amount paid into pension as proof, which I send along with the letter.

Chris

[PinkDalek]

... They will want the year-end certificate from your SIPP, showing amount paid into pension as proof, which I send along with the letter.

No harm in sending but are you certain on that front?

After all claiming higher rate relief for pension contributions and Gift Aided payments online or hard copy returns do not require submission of related documentation, unless requested. The sample Hargreaves Lansdown letter I mentioned earlier does not include mention of sending documentation with it but suggests including a National Insurance number so they can cross-check.

I'd imagine they receive the documentation from the SIPP provider anyway.

[TheMotorcycleBoy]

Hello everyone and thanks for all the replies, and ideas,

It really depends on where your income scomes from. As a simple employee under PAYE you will need :-
P60 :- Tax paid on salery in previous tax year
P11D :- Benifi in kind payements (company car, loans etc)

Well I am a regular employee under PAYE, and no car allowance. However the firm does supplement everyone's income to some extent with stock grants. Unfortunately these are US stocks, and we get the stocks put into a personal account on the US brokerage "ETRADE". However, I know for a fact that my employer somehow instruct ETRADE to sell off a massive wodge off from my grant (at least 40%) presumably to pay off my UK tax bill and NI. Presumably (I don't know the exact mechanics) my US employer then gets the $$$ back from ETRADE and converts it to £££ and sent it over the pond to HMRC and friends.

I managed to download my 2019 and 2020 P60 from the work's intranet just now, and in the "Pay and Income Tax Details" it's abundantly clear that the figure being recorded as "Pay" is noticeably higher than what my annual gross actually was for the year, clearly by the tune of stock grants + bonus.

To attempt to stay squeaky clean I also ensure that I sell my US stocks the moment they vest, in order not to incur any capital gains or $ dividends, avoiding any subsequent historical exchange rate shenanighans in trying report "any other income" to the revenue people.

You've had answers on P60s etc but I'm not certain you definitely need to submit an Income Tax return, depending on your circumstances, to claim Higher Rate relief.

https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief includes:

Claim tax relief in England, Wales or Northern Ireland

You can claim additional tax relief on your Self Assessment tax return for money you put into a private pension of:

20% up to the amount of any income you have paid 40% tax on
25% up to the amount of any income you have paid 45% tax on

You can also call or write to HMRC to claim if you pay Income Tax at 40%.

If you call or write they may insist you fill in a return (I don't know) but it may be they merely adjust your tax coding to grant higher rate relief. Looking further, Hargreaves Lansdown have a sample letter linked to from here https://www.hl.co.uk/help/sipp,-drawdown-and-annuity/sipp/tax-relief/how-do-i-claim-higher-rate-tax-relief.

A ha. That's interesting, I have just read HLs suggested template.

However, what I don't understand from my read of the HL template, is why they seem to have suggested that one enters one's Gross annual pension contributions. Surely the net contribution is more obvious, as one (well a PAYE employee) would be paying out of their taxed income?

So is the implication that I should calculate the gross equivalent when using this form, i.e. divide all net contributions (i.e. what I put in the SIPP) by 0.6? Perhaps to be sure in my own future letters I should include my net contributions and what assume is my gross making a clear statement explaining how I calculated it?

Hi Motorcycle boy

I pay into a pension and also have gift aid payments and am a 40% tax payer and director (I say that because directors very often have to submit returns). I just write to the HMRC each year with a breakdown and they do not require me to fill in a tax return, so you may get away with it if you just write. If you phone, the person on the line may think that it is easier for him just to mark you as needing a tax return rather than take all the details, so it's worth a try.

They will want the year-end certificate from your SIPP, showing amount paid into pension as proof, which I send along with the letter

Thanks Chris, yes that's a good tip!

So extrapolating from your final remark, would I be correct to assume to that a good SIPP provider will send the EoY statement sometime in April of each year?

Thanks again everyone,
Matt

[bluedonkey]

The best way to think of the net pension contribution is that that is the amount that actually came out of your bank account. The gross is the amount after the basic rate tax relief is added. So if you paid £8,000 into the SIPP, the net is £8,000 and the gross is £10,000.

[TheMotorcycleBoy]

The best way to think of the net pension contribution is that that is the amount that actually came out of your bank account. The gross is the amount after the basic rate tax relief is added. So if you paid £8,000 into the SIPP, the net is £8,000 and the gross is £10,000.

Sure - I totally understand that. No probs. Math whizzkid an' all.

I just wondered why the HL template reckoned on entering the Gross figure not the Net, seeing as the PAYE chap (who is most likely the person doing the reclaiming) will be most knowledge about their Net (as you say they see it in their Bank statements) figure, and the Tax Office will know of my tax code and hence be able to calculate the gross figure in a jiffie.

Matt

[chris]

Hi Matt

Thanks Chris, yes that's a good tip!

So extrapolating from your final remark, would I be correct to assume to that a good SIPP provider will send the EoY statement sometime in April of each year?

Thanks again everyone,
Matt

I am with AJ Bell YouInvest and whilst it is a pain to find it on the site, it is a document that you can just download from them. I know that I had to tell them that they needed to make it easier because it was an option under reports, but if you clicked show all, it didn't come up!

To answer Pink Dalek, I didn't send the document initially but maybe because recently I have had a windfall and am near enough to retirement age to want to maximise my pension, I have been paying amounts in that take me out of the higher rate band and that could be why they required extra proof. The bottom line is to make it as easy for them to process a refund as possible and so I have always sent the proof since.

Chris

[TheMotorcycleBoy]

Hi Matt

Thanks Chris, yes that's a good tip!

So extrapolating from your final remark, would I be correct to assume to that a good SIPP provider will send the EoY statement sometime in April of each year?

Thanks again everyone,
Matt

I am with AJ Bell YouInvest and whilst it is a pain to find it on the site, it is a document that you can just download from them. I know that I had to tell them that they needed to make it easier because it was an option under reports, but if you clicked show all, it didn't come up!

To answer Pink Dalek, I didn't send the document initially but maybe because recently I have had a windfall and am near enough to retirement age to want to maximise my pension, I have been paying amounts in that take me out of the higher rate band and that could be why they required extra proof. The bottom line is to make it as easy for them to process a refund as possible and so I have always sent the proof since.

Chris

Cheer Chris,

I was looking at YouInvest and InteractiveInvestor last night. I'll hopefully get round to posting on The Pensions Board in a day or so, to compare and contrast. The whole SIPP thing looks like a good thing to me.

Matt

[PinkDalek]

... I'll hopefully get round to posting on The Pensions Board in a day or so, to compare and contrast.

If anyone has yet to read those topics at Pensions - Practical Problems and/or wishes to contribute further, they are linked below:

SIPP providers: a quick comparison InteractiveInvestor vs AJ Bell
viewtopic.php?f=17&t=26601

HRT reclaim on a SIPP
viewtopic.php?f=17&t=26604