How is the tax relief within SIPP Accounts calculated?
If you are paying the basic tax rate of 20%, every £100 you earn, the tax you pay is £20.
The tax relief process works in reverse: to accumulate £100 in your pension pot, you pay in £80 and the government will pay £20 in tax relief.
For people who pay the higher rate, the calculation is done in the same way: if you pay in £80 you will automatically accumulate £100 in your pension pot, plus you can claim another £20 via your self-assessment tax return which you can contribute to your pension or spend as you wish.
For more information on tax relief, visit the .Gov.uk website
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