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).
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.
I understand from my previous question that I can claim those tax back by pension contributions via SIPP.
And I have been trying to understand the calculation here, so please help me check if my understanding below is correct:
Let's say I ended with £127k annual with a very good bonus, but without any pension contribution this year, the extra 27k on top of the 100k got 60% tax bcos of the loss of all my personal allowance of £12,570 so I am paying:
1>40%*12570 = £5028 2>40% * 27k = £10800
So overall I paid £15828 tax for my earnings between 100k-127k?
And in order to get those tax back including those bcos of lose of my personal allowance.
could you help me point out how much I need to deposit into SIPP ?
1>let's say I deposit £21k after-tax saving trying to solve this, SIPP would top-up 25%, that's 5250 which makes the SIPP pod of £26250?
2>I am then also entitled to get a refund from HMRC of a further how much ? I don't know how to calculate that but is it something like ?
£15828 - £5250 = £10578?
I am fairly new to this and could really use this community's help , thanks in advance. Any input would be appreciated.