Anything I can do ?

[aclare]

Can't believe I've done this.....

In March (tax year 16/17) I was made redundant and received a taxable £115k payment in my final pay packet (actually received £145k but the first £30k is not taxable). Via PAYE I have paid 40% tax on this figure.

After advice from my company, my pension provider and speaking to the tax office twice about my plans - In April (tax year 17/18) I used some of my own savings to add to the redundancy figure and paid £115k (I checked this was a permitted amount) into my pension pot.

I then wrote a letter to the tax office to request a rebate of the 40% tax paid on the original £115k. This equates to a refund of £46k.

I have realised that I have crossed tax years and my claim for a refund is likely to be unsuccessful. This means I have paid 40% tax on the £115k and will pay tax again when I withdraw from the pension.

I am currently not working and in receipt of another final salary pension at £22k per year.

Any help would be appreciated.

[someone]

I don't think there's anything you can do but I'll be interested to hear what others say.

My salary puts me into the taper band for the pension annual allowance. Because my bonus (which is paid at the end of the tax year) was significantly higher than I had expected, I ended up overpaying into my pension. Other than making a charitable donation to recover my annual allowance, I could find no way to shift payments into a different tax year.

I also got caught out on that split year - because I assumed it was when it came out of my pay packet that counted, not when the company finally paid it into my pension - but if it were possible to move pension contributions then many would have been taking advantage of the 80K in that split year.

[AnthonyR]

Couple of things spring out... firstly if you paid £115k into your pension from your personal funds you would only receive 20% higher rate relief, the other 20% Basic rate relief would be paid into your fund. So you should still get that.

The second element is that if you do end up with another higher rate paying job during the year then you might be able to claim the higher rate relief - or go into flexible drawdown and create the liability to generate the higher rate tax (although watch out for the MPAA!).

[aclare]

Thanks for your replies.

My pension provider (which is actually a money purchase occupational scheme which replaced the FS scheme I was in) said they didn't do tax relief at source and only invested the £115,000 they received from me not £115,000 + 20%.

[someone]

Is the maximum you can pay in still capped at 100% of earnings?

In which case it might be possible to get a refund of the rest but IIRC there are timelimits.

[someone]

https://www.aegon.co.uk/support/faq/pen ... tions.html

[aclare]

Yes, just looked back. What a mess !

I was made redundant on the 16th March 2017. I have an e-mail that effectively says my redundancy would be paid on the 15th April but was then paid on the 29th March.

I emailed my pension provider on 27th March asking for the maximum amount I could pay into the pension but they didn't reply with that figure until 5th April.

In that e-mail they said "you will be responsible for claiming back any tax back from HMRC and we will write to you with confirmation when the payment has been invested, which you can use to reclaim any tax liability on this payment."

I was only allowed to pay by CHAPS transfer.