Yes! Your contributions to your Plum SIPP can benefit from tax relief.
Here's how it works:
All eligible UK citizens can contribute up to £3,600 gross annually or 100% of their relevant UK earnings, whichever is greater, subject to the Annual Allowance or Money Purchase Annual Allowance if applicable.
The Scheme Administrator will request basic rate tax relief from HMRC and invest it in your pension plan. For instance, if you contribute £10,000, you pay £8,000, and the Scheme Administrator reclaims £2,000 from HMRC (based on a 20% basic rate tax example).
Contributions are made net of basic rate tax, whether you are employed or self-employed.
If you pay income tax at a higher rate than the basic rate, you can claim additional tax relief through your self-assessment tax return on your personal contributions.
Now, regarding employer contributions, at present, Plum SIPP does not support them.
When is tax relief paid into the SIPP?
As for the timing of tax relief being added to your Plum SIPP account, it generally takes around 2-3 months. The claiming month falls between the 6th and 5th of each month, and the process goes as follows:
The claim is made at the end of the month after the 5th of each month to HMRC.
The funds are usually received in your SIPP during the 3rd or 4th week of the following month.
For example:
Claim month - April 6th to May 5th
Claim made at the end of May
Funds paid into your SIPP by the 3rd/4th week of June