Claiming tax relief on pension contributions

lbk3918

Back in July 2019 I started paying additional contributions of £2k per month into my Nest pension - prior to this it was just the minimum employer/employee contributions. Earlier this year I realised somewhat belatedly that I needed to do something to claim extra tax relief as I am in the 40% bracket on PAYE, so I completed an online self-assessment for 2020/21 which was all fine, I got some tax refunded and my tax code for this year was adjusted upwards - I read on another thread on this forum that HMRC automatically assume that you will be making the same additional contributions in future and adjust your tax code accordingly, which seems quite an assumption but works in my case.
I then turned my attention to 2019/20, where it seemed the only option was to submit a paper SA-100 which I duly downloaded, completed and posted, showing that I had made contributions totalling £25k that year (including the 20% relief added by Nest) in Box 1 on page TR4 of the SA-100 - I also included an SA-102 sheet for my sole employment using the details from my P60.
I recently received back a Self Assessment Tax Calculation from HMRC for 2019/20, however this shows pretty much the same as was on my original P60 - in fact they calculated I owed them an additional £3. This seems incorrect to me, as I was expecting the basic rate band would be increased from £37,500 by £25,000, thereby reducing the total tax due by c. £5k.
Looking back at the SA-150 notes on completing self-assessment I see that it states "Put the total amount in box 1 – that is, your personal contributions paid to the scheme, plus the basic rate tax relief. Include any one-off contributions you made in the year and provide the details of any one-off contributions in ‘Any other information’ on page TR 7."
I didn't put anything in 'Any other information' on page TR7, is that perhaps the problem?

I would welcome any advice on what I should do as next steps.

Albermarle

Can you confirm that you earned enough in 19/20 to be able to benefit from all the extra tax relief due ?
I think you would need to have earned over £75K .
If so it looks like you did everything OK but there are more expert  tax people than me on this forum , so best to wait for one of them to reply.

lbk3918

Hi Abermarle thanks for the response, I earned just over £81k that year and paid total tax just under £20k - standard allowance, no other income.

Dazed_and_C0nfused

TR7 us unlikely to be the problem.

Can you confirm exactly what was included on the paper return you submitted.

zagfles

It looks like a screw up by HMRC. The tax calculation should show the basic rate band extended even if you can't make use of it, but you clearly can. Maybe give them a ring.

lbk3918

Dazed_and_C0nfused said:

TR7 us unlikely to be the problem.

Can you confirm exactly what was included on the paper return you submitted.

Sure, below is what I filled in;

SA-100
Page TR1
My UTR, NINO, Employer Reference, Name & Address, DOB & Phone Number
Page TR2
Q1 Employment, X in Yes Box, No of Employment Pages = 1
Qs 2-9 all X in No box
If you need more pages X in Yes Box (for Q1)
Page TR3
Box 2 untaxed interest £163
Page TR4
Box 1 Payments to registered pension schemes £25000
Page TR5
nothing
Page TR6
my bank details for repayment 
Page TR7
Box 21 X for supplementary pages
Signature & Date

SA-102 (Employment Page)
Name & UTR
Boxes 1-5 from my P60;
1. Pay just over £81k
2. Tax taken off just under £20k
3. Tips & other payments zero
4. PAYE Tax ref
5. Employers Name

That was all I sent.

lbk3918

zagfles said:

It looks like a screw up by HMRC. The tax calculation should show the basic rate band extended even if you can't make use of it, but you clearly can. Maybe give them a ring.

Thanks for the response.
I called them yesterday & eventually got through to someone who was very helpful, but didn't know the answer & needed to speak to someone else who was unavailable, could they call me back in 1 hour? Didn't get a call back...
I was thinking better to write to them, but thought I would check on here first in case I had made any schoolboy error (such as not providing additional info on TR7).

Dazed_and_C0nfused

I think where you may have gone wrong initially is submitting an return where none was needed.

But having done that you will need to follow zagfles advice as it does seem an error on HMRC's part.

They should have either rejected the return as not required or sent you a correct calculation.

lbk3918

Dazed_and_C0nfused said:

I think where you may have gone wrong initially is submitting an return where none was needed.

I thought a return was needed if you want to claim back high rate tax? Is there another way?

Dazed_and_C0nfused

Yes but unless you really want to complicate (probably delay) things you have missed that boat now.  

Claiming higher rate tax relief on pension contributions isn't a criteria for completing a Self Assessment return.  

If you were completing one for some other reason, say the HICBC, then you would include the pension contribution details on the return but it isn't normally a reason to complete one in the first place.

But given you have done then your best option is to get the Self Assessment calculation corrected.

zagfles

Dazed_and_C0nfused said:

Yes but unless you really want to complicate (probably delay) things you have missed that boat now.  

Claiming higher rate tax relief on pension contributions isn't a criteria for completing a Self Assessment return.  

If you were completing one for some other reason, say the HICBC, then you would include the pension contribution details on the return but it isn't normally a reason to complete one in the first place.

But given you have done then your best option is to get the Self Assessment calculation corrected.

Is claiming it any other way substantially easier? I do a tax return every year even though I probably don't need to, if you have simple tax affairs eg employment income, pension conts, gift aid, bit of interest etc it doesn't take long.

OP as an aside, if you made any gift aid contributions you can get higher rate relief on them as well as pension contributions. You should also declare all taxable interest (even if within the savings allowance) even if it makes no difference to your tax.