Question about 40% Taxation re Pensions

jem16

andrewmoorcroft wrote:

The taxation part is done automatically because you only pay tax on the taxable pay which does not include pension. None of us fill in tax forms to claim overcharged tax from pension payments.

As has been explained earlier you have a company pension where the contributions are taken before you are taxed. In this case the full tax relief is given at source and there is no need to fill in a tax form.

In the case of a personal pension the contribution is made after you have already been taxed either at 22% or 40% depending on your circumstances. The 22% is claimed back from HMRC by the pension company and added to your pension. However the extra 18% for higher rate taxpayers can only be reclaimed through a tax return.

exil

"And also maybe it would help if the wonderful HMRC had a clue how much individuals in this country actually earned.......if they did then they wouldn't have to ASK claimants incomes when they fill in their Tax Credit forms, and maybe they wouldn't have given away millions of OUR money by Fraudsters who correcty sussed out that HMRC doesn't have a CLUE about who i who and what they earn."

The government is not ALLOWED to find out how much you earn other than by YOU telling them - unless they have reason to think you're defrauding them. Hence - if you want to claim tax credit YOU need to fill in your income. Alternative is the government knowing all about every single financial transaction that takes place - not something that many of us would welcome, and would be more information than the serried ranks of civil servants and government computers could handle.

andrewmoorcroft

jem16 wrote:

As has been explained earlier you have a company pension where the contributions are taken before you are taxed. In this case the full tax relief is given at source and there is no need to fill in a tax form.

I assumed the OP was talking about a company pension for him to have written "Is it my employers responsibility to change this".
If it is a private pension then this would be a no sense question because his employers would know nothing about his private pension to act. His employers could only do something if it affected his tax code which it wouldn't.

jem16

andrewmoorcroft wrote:

I assumed the OP was talking about a company pension for him to have written "Is it my employers responsibility to change this".
If it is a private pension then this would be a no sense question because his employers would know nothing about his private pension to act. His employers could only do something if it affected his tax code which it wouldn't.

There are two types of company pension - one which deducts contributions before tax and one which deducts after tax.


If the employer runs an occupational scheme then contributions are taken before tax so full tax relief at source.

If it is a group personal scheme then pension contributions will be deducted from post tax salary so you would need to claim the extra 18% through your tax return.

The refund of the 18% could affect your tax code as it can be repaid this way as opposed to a cheque or straight into your bank account. However it is still your responsibility to claim it not the employer's.