Can someone verify that my tax refund on my pension is correct?

wakeywarrior

I have little faith in the Inland Revenue. Recently they calculated the refund on my pension contributions (I am 40% taxpayer but do not complete a return, and so I wrote to them with the details). I was not convinced it was correct, and low and behold it transpired they had calculated it incorrectly. I therefore dealt with them again, and have received a further refund but I am not sure if their method of calculation is correct this time. I have searched all over the internet and forums for a basic calculation tool but cannot find one, and so I would be extremely grateful if someone could look at what the Revenue have told me, copied below, and tell me whether this is correct-

"I have grossed up your net personal pension payments of £5533.48 ( nb agreed I paid this in net) of £5533.48 by dividing the figure by 78 and multiplying by 100 and so I calculate your gross payments as £7094.
I note you are a higher rate taxpayer and so the total relief due is 7094 @ 40% which is £2837.60 but relief has already been given at the basic rate of 22% by your pension provider of £7094 @22% which is £1560.68. The difference in the figures is £1276.92 and so further relief is due of 7094 @ 18% which is £1276.92"

As stated guys I am not entirely convinced this is correct and I have little faith in them given they can (with the same info) come to two different calculations (first one they now say was wrong was unexplained). If anyone who knows how to calculate this could check the above I would be eternally grateful:money:

jem16

wakeywarrior wrote: »

"I have grossed up your net personal pension payments of £5533.48 ( nb agreed I paid this in net) of £5533.48 by dividing the figure by 78 and multiplying by 100 and so I calculate your gross payments as £7094.
I note you are a higher rate taxpayer and so the total relief due is 7094 @ 40% which is £2837.60 but relief has already been given at the basic rate of 22% by your pension provider of £7094 @22% which is £1560.68. The difference in the figures is £1276.92 and so further relief is due of 7094 @ 18% which is £1276.92"

Seems correct to me. You are due 18% of the gross pension contribution which is £7094. The only way it would be wrong is if your total taxable income is less than £47,929 - in which case you would be due less.

What figure did they come up with last time?

whu

From the info provided it seems ok to me also - as Jem says it would be useful to know what the previous figure was - remember also that any savings/dividends you receive will also need to be taxed so this could also reduce the relief you get

Debt_Free_Chick

Looks good to me too.

And the method is spot on - gross up the actual payment, calculate total relief and then deduct the relief given at source.

wakeywarrior

Many thanks guys- it was only out by around £12.50 before, but left me thinking had they got any of it correct? Thanks for reassuring me.:beer: