I am UK based and I had got a good bonus in April 2021 which tipped me over 100k, for example, let's say that's an annual incoming of 125k between April 2021 and April 2022 including the good bonus.

HMRC had adjusted my tax code starting August 2021 and each month, I have got extra tax £700-£800ish deducted but I didn't understand why back then.

Only recently I have figured out that's because my personal allowance goes down by £1 for every £2 above the income limit of £100k. And because of that, I have lost £12k of my personal allowance.

If I didn't contribute to any pension during this period, before the end of this fiscal year (e.g. 05/04/2022), is it still possible to get the lost £12k personal allowance back? If so how ? and would add some of my savings into a SIPP help on that at all? If so how much do I need to add to it? and how can I claim the lost £12k back?

The company I work for won't allow me to do Salary Sacrifice at this stage until the window opens for the next financial year in April.


1 Answer 1


You could open a SIPP and pay into it. You'd have to claim the tax back yourself by contacting HMRC. Note that you're limited to £40,000 of pension contributions per year although if you've unused allowance from the last 3 tax years you can use that up too.

You won't be able back any of the National Insurance that you paid though so your effective tax relief on those pension contributions that end up reinstating your personal allowance would be 60% in England and Wales. Scotland's value is even higher at 61.5%

The amount you can contribute that affects your personal allowance depends on how much you're paying into your employer pension already because that's already at work to reduce your tax burden. The SIPP itself will claim lower rate tax to top up your contribution so you'd want to contribute around £20,000 less your current pension contribution, although if you contribute more than that you'll still get tax relief, just not as much as your personal allowance restoration would already be complete.

  • Thanks for your answer Robert! please see my updated question above asking for further clarification and further questions.
    – RoundPi
    Commented Feb 27, 2022 at 9:54
  • 1
    @RoundPi once you've asked a question and it's been answered you should be very careful not to edit the question in such a way that the answer no longer seems to answer it. I suggest you roll back your edit and ask another question instead. Commented Feb 27, 2022 at 9:58
  • I did explain I could add those further clarifications as comments but it would be very messy bcos of its quite lengthy and I have made it clear with bold font and a line on the question so it’s clear it’s a extension but okay I will open another question per suggested.
    – RoundPi
    Commented Feb 27, 2022 at 17:55
  • I have opened a new question which is a follow-up for this one per what you suggested, would appreciate your input Robert. money.stackexchange.com/questions/149597/…
    – RoundPi
    Commented Feb 28, 2022 at 17:57

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