Are you a higher rate taxpayer that is currently in employment and paying into a private pension?
You could be due a pension tax rebate. It is common for people who pay into a private pension to think that their full pension tax relief amount will automatically be given to them this is not the case in many circumstances.
It is likely you are due a pension tax rebate if…
- You pay tax at 40% or higher.
- You are employed under PAYE.
- You do not complete a self assessment tax return.
- You have not had your tax code changed to reflect your private pension payments.
A bit of background…
Normally, tax relief is applied at a basic rate of 20% to your private pension. This means that higher rate taxpayers only get half of the 40% pension tax relief that is available to them.
If you do not complete a tax return, you will have to claim back any pension tax rebate yourself, meaning you should not presume you are getting everything you are entitled to.
If you do submit a self assessment tax return, the extra pension tax relief should be calculated automatically as part of your assessment.
Taxpayers who have an accountant or IFA, or who have a public service or occupational pension scheme, should be receive the largest tax relief they are legitimately entitled to.
Retirement annuities
In the same way extra tax relief can be claimed on private pension payments it is possible to claim extra tax relief on retirement annuities.
Pension tax rebate timescales
A claim for a pension tax rebate can be made for four preceding tax years, which means you could be getting a substantial sum once you’ve added them altogether.
How To Claim a Pension Tax Rebate
A claim can be made by yourself directly with HMRC and you can use our free guide higher rate pension tax relief guide to support you through the process.
