Who pays the 20% tax into the pension fund?

18hpalsingh

As a part of a settlement, my employer has agreed to pay a lump sum into the personal pension fund. Who is going to put the 20% tax into the fund ? The Employer or HMIT ? How does one ensure this is done before taking the pension?

jem16

18hpalsingh wrote: »

Who is going to put the 20% tax into the fund ? The Employer or HMIT ?

The pension provider will claim the refund from HMRC and add it to your pension.

How does one ensure this is done before taking the pension?

Look at your pension statement.

Aegis

18hpalsingh wrote: »

As a part of a settlement, my employer has agreed to pay a lump sum into the personal pension fund. Who is going to put the 20% tax into the fund ? The Employer or HMIT ? How does one ensure this is done before taking the pension?

If it's an employer contribution, then the sum will be paid in gross and there won't be a 20% payment to reclaim from anywhere.

jamesd

Employer contributions are normally gross. Since no tax was deducted before paying it in, none gets added after it's paid in.

If for some reason your employer deducted income tax and paid it as if it was a contribution from you, then if the paperwork is correct 25% will be added to it, generally late in the month after the money goes in, according to a fixed schedule.

Normal contributions by individuals from after tax pay get that 25% added on that fixed schedule.

You don't accumulate a large backlog of tax relief that you need to deal with at retirement, it's all done soon after the money goes in.