NHS additional pension: lump sum and tax relief

butterfly72

I recently bought some additional NHS pension by lump sum. I paid by cheque. I wrote to HMRC as I'd paid tax on this lump sum to see if I was due any tax relief.

Their reply (for more info) seems to imply that I will only be able to claim if I am a higher rate tax payer which I'm not. I thought that you didn't have to pay tax on pension contributions, instead you pay tax when you draw your pension. I'll be paying tax twice as the lump sum came from already taxed income.

Maybe I'm missunderstanding. Can anyone shed any light?
thanks

jem16

butterfly72 wrote: »

I wrote to HMRC as I'd paid tax on this lump sum to see if I was due any tax relief.

Did you make them aware that it was a lump sum payment into a Public Sector pension and that the money came from post tax income? You are of course due tax relief even as a basic rate taxpayer.

Your previous thread contained all the info.

https://forums.moneysavingexpert.com/discussion/3260494

dunstonh

Nearly always nowadays, any personal contributions are made net of basic tax relief.

So, if you paid £2000 by cheque then your gross contribution was £2500.

Deneb

My wife recently made an additonal NHS pension purchase by lump sum via a cheque payment. The tax was refunded on her following month's pay slip, so I would check that or ask your pay department before querying it with HMRC.

Edit having just seen Dunstonh's post - that wasn't how it worked with my wife's purchase. She was quoted a cost to purchase additional pension by a single lump sum and had to pay the sum quoted (just over £4000) by a cheque submitted with the NHS application form. Her next pay slip contained a tax refund of just over £800 that she has put back into her savings.

jem16

dunstonh wrote: »

Nearly always nowadays, any personal contributions are made net of basic tax relief.

So, if you paid £2000 by cheque then your gross contribution was £2500.

Public Sector Additional Pension lump sum payments don't work like Personal Pension contributions. The whole gross amount is paid.

A. We cannot advise you about your personal tax position but members of a registered pension scheme, like the NHS Pension Scheme, can normally contribute up to 100% of their salary and claim tax relief. contains more information about limits on contributions and benefits.

When paying for AP by instalments tax relief is usually received through the PAYE system. If you pay by lump sum you will need to contact your local tax office or complete a self assessment tax return to claim the tax back.

butterfly72

jem16 wrote: »

Did you make them aware that it was a lump sum payment into a Public Sector pension and that the money came from post tax income? You are of course due tax relief even as a basic rate taxpayer.

Your previous thread contained all the info.

https://forums.moneysavingexpert.com/discussion/3260494

yes, I sent them the receipt from the nhs pensions office which showed the payment of £5500 by lump sum and I did stipulate that it was post tax.

jem16

butterfly72 wrote: »

yes, I sent them the receipt from the nhs pensions office which showed the payment of £5500 by lump sum and I did stipulate that it was post tax.

Perhaps they just need more info in the form of your total income and tax paid before they can calculate how much tax relief you are due?

butterfly72

jem16 wrote: »

Perhaps they just need more info in the form of your total income and tax paid before they can calculate how much tax relief you are due?

Thanks, you're probably right. I'll send everything they;'re asked for, despite already following their instructions that you posted! Maybe they are getting confused because I'm also buying additional pension by regular payments and added years!

Nothing's easy is it? It was difficult enough buying the additional pension!! Mind you what did i expect dealing with the nhs and hmrc!!:rotfl:

jem16

butterfly72 wrote: »

Thanks, you're probably right. I'll send everything they;'re asked for,

So what have they asked for?

butterfly72

They want details of my annual personal pension contributions, confirmation from my employer of amounts deducted each year, copy of payslips, a copy of the PPCC - personal pension contributions certificate (i guess thats the receipt again).

I think I'll rewrite and explain AGAIN what I'm buying and have bought with all the info above.

jem16

butterfly72 wrote: »

They want details of my annual personal pension contributions, confirmation from my employer of amounts deducted each year, copy of payslips, a copy of the PPCC - personal pension contributions certificate (i guess thats the receipt again).

I think I'll rewrite and explain AGAIN what I'm buying and have bought with all the info above.

Sounds fairly straightforward. They have to be sure you are entitled to tax relief as there are certain rules that apply regarding tax relief on pension contributions. Without the info they have asked for they would not know if you have exceeded that allowance.