Pension Payments - Tax

bimba

As a higher rate tax payer and paying into a pension plan. How do I claim back any tax due?

jem16

If it's a personal or stakeholder pension the first 22% is claimed for you by the pension company. The remaining 18% should be claimed through your tax return.

If it's a company pension scheme the contributions are usually taken off before tax so there is nothing more needs to be done.

Debt_Free_Chick

What type of pension plan? If it's an occupational pension scheme you should be getting full relief at source.

Otherwise, your contribution is deemed to be net of basic rate tax so relief at the basic rate has already been deducted. To make a claim for any additional relief, call the tax office and ask for Form PP120 - complete it and return to your tax office.

bimba

I am working for the local council and it is paid via my wages as superannuation!

Debt_Free_Chick

bimba wrote: »

I am working for the local council and it is paid via my wages as superannuation!

You are almost certainly getting the tax relief in your net pay, then. The pension contributions are deducted from your gross pay before your tax code is applied - so you're only paying tax on your gross pay, less the pension contributions.

No need for you to do anything

Newly_retired

This is interesting. I am in the process of sorting out a tax issue for 2006-7 which HMRC now say has pushed me into the higher rate band. Does this mean I can now claim a re-adjustment to my pensions contributions on which only basic rate was credited?

Debt_Free_Chick

Newly_retired wrote: »

This is interesting. I am in the process of sorting out a tax issue for 2006-7 which HMRC now say has pushed me into the higher rate band. Does this mean I can now claim a re-adjustment to my pensions contributions on which only basic rate was credited?

They should rework the entire tax calculation to determine the correct total liability for the year.

If you put the contributions on your tax return, then you shouldn't need to do anything as they will be brought into the calculation.

If you didn't put them on (as you thought you had received all the tax relief you were due) then you need to tell HMRC about them.

Newly_retired

No I didn't put them on. Both my superannuation and AVCs were deducted from gross salary. Does this make a difference?

jem16

Newly_retired wrote: »

No I didn't put them on. Both my superannuation and AVCs were deducted from gross salary. Does this make a difference?

Yes it does. Your pension contributions were taken before any tax and figures from your P60 would be minus those contributions so you have full relief at source.

I noticed your other thread about a chargeable gain taking you into higher rate tax bracket. Remember to take off the amount that you paid into your pension and AVCs as this will reduce your taxable income. Does it still take you into higher rate tax?

Newly_retired

You are right - I am trying to sort out this at the moment. [ Rang AXA who were no help at all about the chargeable gain ]
"Full relief at source" on my pension contributions - yes but surely I got this only at basic rate as at the time I was a basic rate tax payer?
"take off the amount that you paid into your pension and AVCs" - ie do I deduct these sums from my income calculations? If so , this will bring me back down to basic again.
Is this something I can ring up and discuss with HMRC, as I am really not sure how to proceed?

jem16

Newly_retired wrote: »

You are right - I am trying to sort out this at the moment. [ Rang AXA who were no help at all about the chargeable gain ]
"Full relief at source" on my pension contributions - yes but surely I got this only at basic rate as at the time I was a basic rate tax payer?

As your pension contributions were paid before tax your taxable income is reduced by that amount so you get full relief at source whether it is 22% or 40%.

"take off the amount that you paid into your pension and AVCs" - ie do I deduct these sums from my income calculations? If so , this will bring me back down to basic again.

Take your full salary and then deduct the amount you paid into your pension and AVCs. Add on any gross interest from savings, dividend payments + tax credit plus the chargeable gain. If all that is less than £33,300 you are still in basic rate tax land.

EDIT - added this on yesterday but it seems to have disappeared. Remember the £33,300 is taxable income so take off your personal allowance too.

Is this something I can ring up and discuss with HMRC, as I am really not sure how to proceed?

Yes you can. Just make sure you tell them that your pension contributions are taken before you are taxed. I had to point this out to them last year when the person at the other end of the phone tried to count my gross income and not my taxable income.