Private Pension Contributions: 2020-2021 Tax Year

pcalluk08

Hello 
Due to covid restrictions, I only received a national insurance number in the summer of 2021 even though I have been living and working in the UK for 2 years. My question relates to the 2020-2021 tax year.

I worked the full 12 months of the 2020-2021 tax year and earned a gross income of GBP 59,659.  My tax code was 1250L and I paid GBP 11,344 in income tax.
My problem/question arises from the GBP 4,204 private pension contributions(RELIEF AT SOURCE) I made in 2020-2021. The pension provider didn't claim any tax relief on the contributions because I didn't have an NI number. 

I informed HMRC last week about the pension contributions, and they recalculated my income tax for 2020.
The new calculation is 8,340 at 20% and 2,166 at 40%, for a total of GBP 10,507. Therefore, I received a refund of GBP 837.20.

The online salary calculator I used gave me a different calculation and the following message:

Your annual pension contribution of £4,200 will be automatically increased to £5,250 once Basic Rate tax relief has been collected by the pension provider from HMRC.

Due to your pension contributions, you may also be due a tax refund from HMRC of £1,050.00. You can claim this through your tax return or by contacting HMRC.

Question 1: Does the HMRC refund amount look correct? It's less than any online 2020 calculator I used.

Question 2: Is the online calculator message indicating I should claim tax relief in addition to the HRMC refund? It seems to indicate I am due a 1050 refund PLUS 1050 Basic Rate relief. If so, how do I claim any additional refund?

Sorry for the questions, but I am new to the UK and finding the system difficult to comprehend. Payroll is outsourced in my company, and I am working from home, so there is nobody to ask at work. I have read many answers on Money Saving Expert and Money Helper, but I am still not clear on how to fix my 2020 tax return.

Many thanks for any help!

Dazed_and_C0nfused

You are trying to compare two different things.

If the contributions weren't treated as "relief at source" then those rules don't apply.

Can you tell us what your calculation shows in detail as that will establish how HMRC have given tax relief, possibly treating the £4,200 as the gross amount of a relief at source contribution (which doesn't seem right from what you have posted). 

Having a NINO is not actually a requirement to obtain relief at source however now the tax year in question has ended I suspect the pension company won't change things.

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm044220#claiming

pcalluk08

Hello @Dazed_and_C0nfused
Thank you for your answer. Your username is appropriate for my current predicament.

Below is a summary of the information from my GOV Personal Tax portal page:

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HMRC used the following reasons to work out your tax calculation

Private pension contributions

You were not given enough tax relief on your private pension contributions. You were given tax relief on contributions of £0, but the actual contributions you made were £4,204.

Higher rate relief

HMRC have increased the amount of tax you pay at a basic rate from £37,500 to £41,704. This gives you higher rate relief for charitable donations or personal pension contributions (or both). 
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If you think the 837.20 refund is correct (I can see this is 20% of my contributions), do I have nothing left to claim (in relation to pension contributions) for the 2020 tax year? My pension provider took zero tax relief at source for 2020, so do I need to claim for the 20% basic tax relief as well? I thought I would get 40% relief as a 'high earner'.

One reason I am confused is a letter I received from HMRC for the 2021 tax year. They changed my tax code from 1257L to 1501L, because they calculated I require personal pension relief of 2,447 in 2021 (my monthly contributions are less this year). The accompanying note from HMRC says "This is the tax relief you have claimed for your personal pension contributions because you pay income tax at the higher rate. Basic rate tax relief is given at source by your pension provider". This seems to indicate I will receive 40% relief in 2021, but I only received 20% in 2020.  

Dazed_and_C0nfused

Based on everything you have posted it seems HMRC have assumed you contributed £3,363 in 2020:21 with the pension company adding basic rate tax relief to make a gross contribution of £4,204.

The refund for 2020:21 is based on that, seemingly incorrect, premise.

2021:22 will just be an estimate as the tax year isn't finished.  Have you been receiving basic rate tax relief throughout 2021:22 or will you have a mix of gross (with no tax relief added to the pension) contributions and some where basic rate relief has been added?

I suspect this may take a while to resolve and maybe the best starting point would be to get confirmation, in writing, from the pension company about what happened in 2020:21 so you can get the correct tax relief.

pcalluk08

Hello again
Thank you for replying. I will contact the pension company tomorrow to request documentation for the 2020:21 tax year. Then I will contact HMRC again.

Unfortunately, my 2021:22 year is a mixture of months with and without tax relief. The pension company has already said in writing they won't assist in claiming the relief for April 21 - July 21 where I am missing the relief. Therefore I should probably ask for some documentation from the pension company for these missing months too.

Thank you for helping out. I am not as c0nfused as I was previously. Next, I must convince HMRC that I am due the additional relief. I will keep you posted!