Ndubuisi 'Andy' EgwimMoney Coach for Medics|Ex-NHS GP|21+ Yrs Investor| Founder, MoneyWiseDoctor.com|Helping Medics Avoid Big Money Mistakes

Tax Efficiency for High Earners with SIPPs

20 Jun 2026 · 2 min

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1:45

In this conversational video, Barry, a high‑rate taxpayer, discusses how to maximise tax efficiency using a Self‑Invested Personal Pension (SIPP). Andy clarifies that SIPP contributions attract immediate tax relief (about 20‑25% net) and the remaining relief is reclaimed via self‑assessment, effectively giving a 40% tax saving for a 40% taxpayer. They compare contributions made from a company account—treated as an allowable expense and therefore not subject to income tax—to personal contributions. Andy walks through a concrete example where Barry considers putting £20,000 into a SIPP, outlining the expected tax refund. The dialogue also touches on related high‑income tax issues, such as the child‑benefit tax charge for families with young children. The exchange is informal and instructional, aiming to help high‑earning individuals understand the mechanics and benefits of SIPP contributions for tax planning.

Chapters

I'll apply some of these to it. One of, for tax efficiency, for instance, let me use the SIP for instance.
Okay.
I'm a high rate taxpayer.
High income tax, yes.
Yeah, yeah. High income taxpayer. So my tax, looking at that, the money I put into the SIP is prioritized. Yes. Because I get the government.
Actually, yeah. So, so just for someone who didn't understand, Barry, salary is a higher rate taxpayer, so 40%? Yes. So, but that, but if you contribute money to your pension, your SIP, you get your tax back. So that's 40% of gross, which basically is 50% of whatever money you put in your SIP. That's correct. And just to clarify, Barry, sorry that I'm butting in there, 20% or 25% net you get automatically, and then the other 20-25% you get from self-assessment. So if, for instance, let's use numbers to make it clear, if you said, okay, you want to be tax efficient, you made money from your locums and you didn't want to cross into the 60% tax trap and you said, oh, I'm going to put this $20K into my SIP. So what would, what would that mean in terms of like before you've invested the money, what would that mean in terms of tax back you're going to get?
Okay, I'll put it in two ways. First, if I get that correctly, is that That if it's from the company account, that's already an expense, so I'm not paying tax on that.
Good.
Yeah.
Good.
And one of the SIPPs I have, the main one I've used mostly is that, that as far as salary is concerned.
Yes.
I've dropped my Sessions No Doubt, but that, that comes back in. And, uh, my children, I still have young children, so I was looking at, uh, high income child benefit tax recently.