Informing HMRC about pension contributions

crystal_pixie_2

All,

Pension saga continues! Just to make sure I am on the right track. As I am now contributing to 2 new pensions as a 40% tax payer, am I right that I should be telling HMRC about these contributions?

I presume that I don't have to tell them about my DB contributions do I? I just wondered because I haven't been a higher rate tax payer that long (about 2 years).

If I do need to tell them about my DB scheme can I let them know I have been paying into the scheme all the time I have been a higher rate tax payer?

When I ask my works pension team they don't seem to be too sure about this.

xylophone

https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief

greenglide

am I right that I should be telling HMRC about these contributions?

Do you not use self assessment to claim the extra tax relief on Gift Aid payments if you are still a higher rate tax payer after your pension payments?

crystal_pixie_2

Greenglide - sorry for the delay in replying.

I don't use self assessment at all really. My circumstances have changed dramatically in the last 2 - 3 years (divorce etc) so its not been at the forefront of my mind to do anything.

Company sorts out my PAYE and its only now I have savings of any kind so I thought now is the best time to get this in order.

I am putting savings into a NISA and now looking at starting a pension other than my works DB scheme. I haven't contributed to a private pension in the last 10 years - hence the questions.

I am told that my DB scheme is on a salary sacrifice so it is taken at source.

Linton

You dont tell HMRC about your DB pension - as its salary sacrifice it's your employer who is seen as paying into your pension, not you. You will need to to tell them about any private pension you take out.

greenglide

.... and if you are a higher rate tax payer after pension payments etc you still want to tell them about any Gift Aid.

Gift Aid increases the width of your basic rate tax band so can make it easier to achieve the avoidance of HRT or the reduction if you still pay same.

redpete

crystal_pixie wrote: »

I am putting savings into a NISA and now looking at starting a pension other than my works DB scheme. I haven't contributed to a private pension in the last 10 years - hence the questions.

I am told that my DB scheme is on a salary sacrifice so it is taken at source.

Are you considering paying into a private pension instead of your employer's DB scheme? If so this would normally considered an odd choice; many employees get upset about if the employer tries to bring a DB scheme to an end because they are such a good deal.

crystal_pixie_2

redpete wrote: »

Are you considering paying into a private pension instead of your employer's DB scheme? If so this would normally considered an odd choice; many employees get upset about if the employer tries to bring a DB scheme to an end because they are such a good deal.

RedPete - no my DB scheme is good so I am keeping that going!

I am looking at alternatives as the advice I have been given is if I do want to retire early (or even the dreaded redundancy) then the best way is to supplement the works pensions with other private pensions pots to keep you going until 65.

I was lucky enough to find out about my old SERPs pot in time to re-invest it and that got me looking at otherways to save and improve my tax situation. So I now have 2 private pensions that I am contributing to - which I have been told I must tell the HMRC about.

Sobryma

crystal_pixie wrote: »

RedPete - no my DB scheme is good so I am keeping that going!

I am looking at alternatives as the advice I have been given is if I do want to retire early (or even the dreaded redundancy) then the best way is to supplement the works pensions with other private pensions pots to keep you going until 65.

I was lucky enough to find out about my old SERPs pot in time to re-invest it and that got me looking at otherways to save and improve my tax situation. So I now have 2 private pensions that I am contributing to - which I have been told I must tell the HMRC about.

If you have a work DC scheme you will probably be better contributing to it as much as possible as 1. the charges are likely to be lower or as a minimum competitive 2. it may well be under salary sacrifice.

If your work scheme is under salary sacrifice you do not need to tell HMRC as the pension payment is deducted from your gross pay before tax is calculated. If it is not if you tell HMRC the amount you intend to pay in during the tax year and they can adjust yor tax code for relief greater than 20%.

crystal_pixie_2

Sobryma wrote: »

If you have a work DC scheme you will probably be better contributing to it as much as possible as 1. the charges are likely to be lower or as a minimum competitive 2. it may well be under salary sacrifice.

If your work scheme is under salary sacrifice you do not need to tell HMRC as the pension payment is deducted from your gross pay before tax is calculated. If it is not if you tell HMRC the amount you intend to pay in during the tax year and they can adjust yor tax code for relief greater than 20%.

Sobryma - Unfortunately my DB scheme does not allow me to add any more contributions to my scheme. I have to contribute to AVCs that are very restrictive.

Hence the reason why I am trying to find a better place for my very small SERPS pot. Its a bit of mindfield at first understanding all the jargon and I have been disapointed that most IFAs are not willing to help unless you have a pot of at least £30k. So I am going it alone. Hence the reason I keep reading all the good advice on here!