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Where Taxpayers and Advisers Meet

Retrospective claim for pension relief

Oli From Reading
Posts:3
Joined:Sun Aug 29, 2021 3:08 pm
Retrospective claim for pension relief

Postby Oli From Reading » Sun Aug 29, 2021 4:39 pm

I'm a higher rate tax payer and (very foolishly!) discovered I haven't claimed for higher rate income tax relief on a small pension that I pay into annually (not a huge sum).

I will include it in this year's self assessment form but is there a way I can retrospectively claim it for previous years?

Thanks

D&C
Posts:50
Joined:Mon Nov 25, 2019 11:35 pm

Re: Retrospective claim for pension relief

Postby D&C » Mon Aug 30, 2021 5:34 am

Assuming you have completed Self Assessment returns in previous years then yes although by filing incorrect returns in previous tax years you will need to go down two different routes.

For 2019/20 you can simply amend your return.

For 2017/18 and 2018/19 you will need to make a claim for overpayment relief. Details on gov.uk here,
https://www.gov.uk/self-assessment-tax-returns/corrections

Don't forget there is no fixed additional tax relief due for "relief at source" pension contributions, the gross contribution increases the amount of your baosc rate band which can make more income taxable at 20/21% and less taxable at 40/41%.

If you didn't complete Self Assessment returns in those years then post back as different procedures apply.

Same if you weren't contributing via the relief at source method as it is highly unlikely any additional tax relief would be due.

D&C
Posts:50
Joined:Mon Nov 25, 2019 11:35 pm

Re: Retrospective claim for pension relief

Postby D&C » Mon Aug 30, 2021 5:35 am

That should have been basic rate band :roll:

Oli From Reading
Posts:3
Joined:Sun Aug 29, 2021 3:08 pm

Re: Retrospective claim for pension relief

Postby Oli From Reading » Tue Aug 31, 2021 8:04 pm

Thanks very much D&C for the feedback.

I guess mine counts as a "relief at source" pension (I didn't know that term - useful to know) - it's a 'standard' stakeholder work pension I believe where so much is taken from my salary but I can see from my pension account that the amount paid in is 25% higher (ie they claimed back 20% of what I paid in income tax) (that only refers to the employee's contribution - there's an independent employer's contribution too).

I thought as a 40% tax payer I should be able to claim back the rest of the income tax from my contributions, by quoting it in the "relief at source" box of my tax return (and equivalent in previous years, I've done SA returns for many years now). I was confused by your "no fixed additional tax relief due" comment.

But thanks for the pointers to the 'tax return corrections' page, just what I was looking for :D

Oli

robbob
Posts:3146
Joined:Wed Aug 06, 2008 4:01 pm

Re: Retrospective claim for pension relief

Postby robbob » Wed Sep 01, 2021 9:00 am

Ref these comments from D&C
Don't forget there is no fixed additional tax relief due for "relief at source" pension contributions, the gross contribution increases the amount of your basic rate band which can make more income taxable at 20/21% and less taxable at 40/41%.
all D&C is poiinting out is the technicalities of how relief is given - you only get a tax saving if the extending of your basic rate band ensures that you will now pay less tax at 40% - practicably speaking if you have paid 40% tax you will see the benefit as you expect.

Normally i woould say be 100% sure its relief at source scheme being operated (explicit written cofnrimation from employer) - however the 25% added into your pot by hmrc seems to confirmn this is the case beyond any reasonable doubt.

Note you extend basic rate band by grossed up value of net payment made - eg if you had £80 deducted from net salary and £20 added intoo pension pot by hmrc - thats £100 added to pension grossed up and you will extend basic rate band by £100 - be careful you put in correct value so that its the gross value showing on the calc extending your basic rate band and noota higher or lower sum - hmrc like to mix gross and net values on tax return entry just to keep us on ourr toes !!

No relief available for employers payments !!!

someone
Posts:521
Joined:Mon Feb 13, 2017 10:09 am

Re: Retrospective claim for pension relief

Postby someone » Wed Sep 01, 2021 9:05 am

No relief available for employers payments !!!
Of course, employers payments do count towards the annual allowance though so they can cause you to lose the relief again on other payments (including the 25% reclaimed by the pension provider)

darthblingbling
Posts:417
Joined:Wed Aug 02, 2017 9:09 pm

Re: Retrospective claim for pension relief

Postby darthblingbling » Wed Sep 01, 2021 11:00 am

Technically the relief you get from employer contributions are that they're paid tax and NI free. Although as pointed out the tax saving could be clawed back if the annual allowance is exceeded.

This is way sal sac arrangements are becoming more common as there are savings for both the employer and employee given the NI saving.


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