Lump Sum to Pension & Tax Relief?

philng

I have just made a £7500 lump sum payment in to my AVC through my works pension. I have been advised that as it is not possible to 'grant tax relief for this through the payroll system' I will need to apply through Inland Revenue direct for which they have sent me a certificate to confirm the lump sum made for this tax year 2011/12.

My total earnings for this year will be approx £47000 & tax code 537L.

How do I go about obtaining the tax relief? & will it be paid to me as a one off payment or via my tax code for next tax year?

Thank you.

jem16

philng wrote: »

My total earnings for this year will be approx £47000 & tax code 537L.

How do I go about obtaining the tax relief? & will it be paid to me as a one off payment or via my tax code for next tax year?

Thank you.

Write to HMRC and ask for tax relief on the AVC lump sum. In the letter I suggest you include your total income including savings interest, dividend payments etc plus normal pension payments so that they can work out whether tax relief is due at 40% or 20%. You will also need to enclose the certificate you have been given - take a photocopy of it first.

xylophone

Personal pensions http://www.hmrc.gov.uk/incometax/relief-pension.htm
"You pay Income Tax on your earnings before any pension contribution, but the pension provider claims tax back from the government at the basic rate of 20 per cent. In practice, this means that for every £80 you pay into your pension, you end up with £100 in your pension pot. If you pay tax at higher rate, you can claim the difference through your tax return or by telephoning or writing to HMRC. If you're an additional rate taxpayer you'll have to claim the difference through your tax return.
Contact HMRC"
http://search2.hmrc.gov.uk/kbroker/hmrc/contactus/search.ladv?sr=0&as=1&cs=ISO-8859-1&sc=hmrc&sf=&sm=0&nh=50&ha=34&tx0=49612&fl0=__dsid:&tx1=2037&raction=view

jem16

xylophone wrote: »

Personal pensions http://www.hmrc.gov.uk/incometax/relief-pension.htm

This is a diffeent situation from tax relief on a personal pension. This is a lump sum contribution into a works pension where monthly contributions are normally paid from gross salary. I would suspect it's a final salary pension and the OP is buying Additional pension.

xylophone

I have an idea that when a relative did this, details went on to the annual tax return?
I seem to remember that P11 D details (employer provided benefits) went on as well?

It was a while ago so my memory could be hazy on the details.

jem16

xylophone wrote: »

I have an idea that when a relative did this, details went on to the annual tax return?
I seem to remember that P11 D details (employer provided benefits) went on as well?

It was a while ago so my memory could be hazy on the details.

Deatils could be entered onto a tax return if one was normally completed. However since the OP is asking how to claim I'm assuimg he/she does not normally complete a tax return.

Goldenyears

If the OP does not normally complete a tax return I suggest they include income for 2010/11 as well as 2011/12. I was in a similar position to the OP. I contributed a lump sump to a works FS pension to reduce 40% liability and claimed by letter. HMRC wrote back to ask for income from the last two completed years, althought this may have been because they knew my interest on savings was substantial.

If you give HMRC a sort code and a/c number they should pay into that, otherwise they will send a cheque.