High rate pension tax relief

PJ1973

I’ve been a higher rate tax payer for at least the last 5 years, and have been paying into an occupational (money purchase) pension throughout this time.

I have never completed a tax return.

I learnt yesterday (from a colleague) that I should have told the tax office that I was a higher rate tax payer in order for me to receive an addition 20% tax relief on my contributions.

I feel a bit of a dumb ar+e, but before I start seeing if there is anything I can do to correct this I thought I would come here first.

Can anyone help me? Do you think I can obtain this relief retrospectively?

PJ

CLAPTON

occupational pension schemes usually pay the pension contribution before tax so you are already receiving the 40% tax benefit

check whether you are paying before or after tax being deducted

mickyrod

Mine is paid after tax, and I did have to phone the tax office to get additional amount.

thenudeone

Compare the figures coming off your payslip with the figures shown on the pension provider's statement.

If the latter is higher, then this confirms that the pension is being taken from after-tax income, and pension provider is reclaiming the equivalent of basic rate tax and adding it back on. You need to inform hmrc of the gross and net amounts you've paid so that the extra relief can be paid back to you. You can reclaim for the last 6 years.

They should also change your tax code (effectively raising your basic rate band by the gross amount of the contribution) so that PAYE is calculated correctly from now on.