You are entitled to tax relief on your private pension contributions at the highest rate of tax you pay. We help many higher rate taxpayers who are missing out on their full pension tax relief.
This applies to taxpayers in both PAYE and self assessment systems.
How do I know if I can claim higher rate pension tax relief?
Firstly, you need to know your own tax bracket. For the 2017-18 tax year, you are were a Higher Rate taxpayer if you earned between £46,351 and £150,000. This means that you paid 40% tax or more on this portion of your earnings.
As the highest rate of tax you pay is 40%, you can reclaim 40% of the tax you paid on your private pension contributions. It is the additional 20% that most Higher Rate taxpayers are missing out on.
Is the tax relief really worth the time?
If you’re wondering if it’s going to be worth the hassle of finding out more, pop your details into our higher rate pension tax relief calculator. You only need to enter how much you paid into your pension and it will give you a personalised estimate of how much higher rate pension tax relief you could be owed. You don’t enter any identifiable information and the calculator does not collect any data. Give it a go – the amount may well give you the incentive to jump straight into making a claim.
The average higher rate pension tax relief amount we achieve for our clients is over £800, per tax year.
Can I backdate a claim for pension tax relief?
Yes, you can backdate your pension tax relief claim for the last four tax years. Remember that the tax bands change each year, so if you need to claim for previous years, you need to check those specific figures.
Any further back than this and the tax is lost to the Treasury forever. Given that people often pay into their pension schemes for decades, it is crucial that people know about their extra 20% tax relief entitlement as Higher Rate taxpayers as soon as possible.
Higher rate pension tax relief is not automatically applied
Pension tax relief is not something that HMRC can automatically apply to your financial position. You must make a claim through the official process.
How do I make a claim for pension tax relief?
There are two different ways of claiming your additional pension tax relief, depending on whether you are in the PAYE or self assessment system.
Self assessment
You include your pension contributions as part of your financial information on your self assessment tax return. If you submitted your 2017-18 tax return without specifying your private pension figures, it is not too late. We can help you make an amendment to your tax return and make an overpayment relief claim, which means that any tax you have already overpaid can be repaid to you.
PAYE
As a PAYE taxpayer that doesn’t complete a self assessment tax return, you need to make a formal written application to have your full pension payments tax entitlement refunded.
Simplifying your pension relief claim
We simplify the whole pension tax relief claim process for you by dealing with all the paperwork, talking to HMRC on your behalf and guaranteeing accuracy.
You will need to gather your information, such as your pension scheme type, your provider and how much pension contribution you made in each tax year of your claim. We start with a free review to make sure that this tax rebate applies to you and then work on a success based fee structure. That means that if there’s no rebate, there’s no fee.
If you are a UK non resident and receive private pension income we can offer different guidance here.
It is important to reiterate, it’s not too late to claim, even if you didn’t include the necessary figures on your 2017-18 tax return. Just don’t wait any longer or you’ll lose out on previous years.
