claiming 40% relief

mpension

Hi, I wonder if I could trouble you guys for some advice?

My wife is going round in circles with HMRC and I'm not sure what is the correct approach now.
She has decided to max her contributions to her pension for as long as she can, so for this year it will be 40%. 20% gets added by her pension provider and she phoned HMRC to ask about this year going forward and a change of tax code. They told her 'as its more than 10k, she will have to do it online'.

I have read on here, you just have to phone them and they will change the tax code. We have looked online and can only see self assessment. surely that's for claiming back tax after this year is over?!

Am i miss reading this, or are we being dumb with finding the info anyplace to update online?

Thank you in advance.

xylophone

Has your wife registered for a personal tax account?

https://www.gov.uk/personal-tax-account

Or write?

Pay As You Earn and Self Assessment
HM Revenue and Customs
BX9 1AS
United Kingdom

mpension

Hi Xylophone,

yes she has a personal tax account, but it does not appear obvious where we add the information.

Thank you for the address, perhaps we will have to resort to that. i had heard its a very slow process if you use mail, but if that's the only real option, we will do that.

Thank you

lisyloo

Is it not an option to call them back and ask?

I always found doing it by letter easiest but if she’s in a hurry and doesn’t want to overpay then ring them again?

xylophone

https://www.aegon.co.uk/support/faq/pension-technical/claiming-tax-relief-pp-faq.html





People who don’t usually fill in an annual self-assessment form, or who don’t want to wait for their higher rate tax relief, can phone or write to their local tax office with details of:

the personal pension scheme that personal contributions are being paid to,
the date that the contributions start, and
the gross amount of the personal contributions paid.
The local tax office will then arrange for their tax code to be changed so that higher rate relief is available throughout the year in which the contributions are being made. Any changes to the information given can be notified either by letter or through a self-assessment tax return at the end of the tax year.

It won't take long to write a letter (see above) - I know HMRC are slow but they should certainly be able to deal within this tax year and change the code - this should sort things out.

NoMore

Rather than a specific form I have just used the online chat for this exact circumstance.

However I don't understand why they have said you must specifically go online to do it? A phone call should have been enough, unless both you and the operator were not clear in what you wanted and were confusing each other ?

All you generally need is your Annual Income, and your Gross Pension contribution and they will work it out from there. Note Gross contribution is your contribution + the 20% already claimed by the pension.

mpension

Thanks for all the guidance. My wife has called them twice now and hasn't got further. maybe she wasnt clear with them, but I'm not sure how we can get it wrong when we ask for 40% pension tax relief for the current year.
we will try again this evening.

NoMore

Perhaps some figures would help ? Your maybe misunderstanding how much tax relief you actually can get ?

Assuming the standard personal allowance , Has your wife earned excess of £50k ? She can only claim extra tax relief on the amount in excess of this, not the whole amount as is commonly assumed, due to the way pension companies advertise tax relief.

So if she earned 55k and made Gross contribution of 10k, only 5k of it would be subject to the extra tax relief you could claim

mpension

My wife just phoned again and this person said you couldn't do it at all!!

They really are quite variable in terms of competence.

NoMore

Does your wife's pension use salary sacrifice, that would explain why you can't get tax relief, because there's no tax to claim back

Dazed_and_confused

The op did originally say

20% gets added by her pension provider

so it sounds like a relief at source contribution however it would be helpful if the op could provide a bit more information about exactly what his wife is doing?

Maybe she is being similarly reticent with HMRC as there usually isn't any problem claiming any additional tax relief, providing the contribution has actually been paid in the current tax year (HMRC never allow tax relief for pension contributions made in one tax year in the tax code of a different tax year).

Maybe the reference to 40% relief is confusing things as strictly there is no such specific "40%" relief. The gross contribution simply increases the amount of basic rate tax payable, which can reduce the amount of 21%, 40%, 41%, 45% or 46% tax payable