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    • mahatma andy
    • By mahatma andy 22nd Sep 16, 10:58 AM
    • 18Posts
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    mahatma andy
    Tax Relief on Pension Contribution
    • #1
    • 22nd Sep 16, 10:58 AM
    Tax Relief on Pension Contribution 22nd Sep 16 at 10:58 AM
    I am in the process of being made redundant and intend to put most of the redundancy payment into my pension. I'm a member of the company DC scheme and would ideally like to put the money into that scheme before i leave (as it should be straightforward and simple with regards to tax relief). Unfortunately, the redundancy payment will be made on the payroll run after i leave and as i will no longer be an employee at that point, i can't then pay into the company scheme. The company has parked this in the 'too difficult' pile.

    The alternative is to make the payment into a SIPP after i leave and get my hands on the money. This is fine, but as i understand it, i would need to make the contribution net of basic rate tax, then claim back the higher rate relief. How long does it take HMRC to repay this - does it need to wait until the end of the tax year then claim back via self assessment? Or am i able to get them to process this within the current tax year?

    Thank you

    Andy
Page 1
    • zagfles
    • By zagfles 22nd Sep 16, 8:06 PM
    • 10,985 Posts
    • 9,028 Thanks
    zagfles
    • #2
    • 22nd Sep 16, 8:06 PM
    • #2
    • 22nd Sep 16, 8:06 PM
    Are you going to get another job? If so HMRC can usually adjust your tax code to give you higher rate relief so you get it in year.

    Note that the tax free part of redundancy, usually the first £30k, doesn't count as "relevant earnings" for the purposes of the 100% of earnings pension tax relief limit.
    • mahatma andy
    • By mahatma andy 23rd Sep 16, 8:36 PM
    • 18 Posts
    • 4 Thanks
    mahatma andy
    • #3
    • 23rd Sep 16, 8:36 PM
    • #3
    • 23rd Sep 16, 8:36 PM
    Thank you for that. Not sure if I'm going to retire, depends on how retirement suits me.
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