40% tax payer only getting 20% tax relief

penwise

My friends has just been looking at her pension details and it looks like she should have been claiming additional tax relief.

She is in the 40% tax bracket and she thought this was all done automatically and it is not.

How many years can she get back?

What is the simplest way to get this sorted?

Thanks

colsten

She should have done a tax return / self assessment. Best if she contacts HMRC and asks what she can do about it now.
http://citywire.co.uk/money/how-to-claim-higher-rate-tax-relief-on-your-pension/a579313

penwise

she is also worried that when she is looking at 'what your pension might be worth when you retire' sections it might be wrong ie assuming she got the higher tax relief and it will now always be wrong.

dano17439

If she has no other income so her finances are straight forward, she doesn't even have to complete a tax return. Just a letter or a phone call to HMRC will do the trick

Linton

If she has just been looking at the pension details your friend wont see any higher rate tax relief. 20% relief goes into the pension and 20% goes back to her via her tax code. So whether she is a higher rate tax payer or not wont make any difference to the pension value estimation.

Changed wife to friend!

maximumgardener

she should write to HMRC with her details

Number75

You can go back 4 years.
So tax year 2012-2013 should be claimed by April this year, 2017.

However, you don't say what kind of pension it is. If it's a personal pension - tell her to get on it!

If it's a Company Pension (Final Salary or Money Purchase) from what I understand it is done automatically - so nothing to claim there.

Number75

For current / future years - HMRC adjusted my personal allowance. I just rang them up, told them how much I expected to put into my personal pension this year, and they adjusted my code - I received a new coding notice very quickly and take home pay went up next month. No paperwork, just one phone call!

Malthusian

penwise wrote: »

she is also worried that when she is looking at 'what your pension might be worth when you retire' sections it might be wrong ie assuming she got the higher tax relief and it will now always be wrong.

"What your pension might be worth when your retire" sections are always wrong - because it is a mathematical certainty that growth rates and inflation rates will be different from those assumed. They also make outdated assumptions on how the pension will be used to pay an income in retirement.

martinsurrey

Number75 wrote: »

If it's a Company Pension (Final Salary or Money Purchase) from what I understand it is done automatically - so nothing to claim there.

that is wrong,

If it is a salary sacrifice scheme, then nothing needs to be done, as it is all contributed before tax comes into play.

however a normal EE pension contribution for a DC pension through an employer, you will pay £80 of net pay for every £100 you want to contribute to your pension scheme, you will then have to claim back the higher rate tax, you are right that its a simple call to HMRC, but you must call them a few times per year, once per year to let them know the final amount you contributed in the prior tax year, and once to let them know the estimate of the current years contributions.

Your employer plays zero part in this and it is not automatic.

Number75

Thank you for the corrrction! I wrote "as I understand it" as I didn't want to present it as hard fact. It was something I'd been told previously and had a quick google before I said it here - of course, now I can't find the website! But I only ever bother with newspaper websites or those from pension providers! Wish I could find it now, as you say it's wrong.
Off to check mine company pension... I'm 99% certain it's salary sacrifice though.

Thanks again for correcting me for the OP.