Tax relief on gross Pension Contribution help please

Wsb5tails

I made a gross £25k pension contribution from savings in January 23.  My Pension provider does not add any tax relief, not even basic rate.  I was told to write to HMRC for the relief which would be paid to me.

I have been expecting £6250 + £1k in respect of the £5k of income that I paid 40% tax on.

HMRC will only accept that I am due the £1k rebate.

I made the additional Pension Contribution to my most recent employers scheme on leaving.  I paid contributions via Salary Sacrifice during employment.  The £25k payment was made to use up Pension Annual Allowance and I did not previously have to file Self Assessment.

I am now retired, living on a DB Pension leaving the DC Pension untouched for another 4 years.

HMRC have hung up on me twice now.  How can I get this resolved?

Dazed_and_C0nfused

Have you made it crystal clear that this wasn't a RAS contribution?

There is no fixed amount with a gross contribution like that, it works like the Personal Allowance so tax relief can vary widely.

How much tax did you pay in the tax year you made this contribution in?

Wsb5tails

I have tried to make them understand but they got argumentative about a £3k refund that was made in respect of an over payment of Income Tax for not working the full year.

I paid £12500 in tax minus the £3k that was then refunded so £9500.

Albermarle

Wsb5tails said:

I made a gross £25k pension contribution from savings in January 23.  My Pension provider does not add any tax relief, not even basic rate.  I was told to write to HMRC for the relief which would be paid to me.

I have been expecting £6250 + £1k in respect of the £5k of income that I paid 40% tax on.

HMRC will only accept that I am due the £1k rebate.

I made the additional Pension Contribution to my most recent employers scheme on leaving.  I paid contributions via Salary Sacrifice during employment.  The £25k payment was made to use up Pension Annual Allowance and I did not previously have to file Self Assessment.

I am now retired, living on a DB Pension leaving the DC Pension untouched for another 4 years.

HMRC have hung up on me twice now.  How can I get this resolved?

Ideally you should have checked first with the provider what happens with one off personal contributions.
I made regular pension contributions with SS , so no tax relief was added by the provider. When I made a one off payment they added basic rate relief, but as I understand when you make contributions via two different methods, some providers can not deal with it.

Wsb5tails

I was aware they couldn't deal with it, I was lead to believe HMRC would make it right

Albermarle

Wsb5tails said:

I was aware they couldn't deal with it, I was lead to believe HMRC would make it right

This question might be better answered on the tax forum, as there are some ex HMRC people on there.
Cutting tax — MoneySavingExpert Forum

Wsb5tails

Thank you very much, I will do that

cobson

My wife made a £15k contribution to her pension scheme who were not able to apply tax relief, so we wrote to HMRC to claim it.  It took three letters and about 18 months to finally get it as they initially claimed that no relief was due.  In the end we wrote to their complaints address and made reference to this section of the pension tax manual:

PTM044240 - Contributions: tax relief for members: methods: claims - HMRC internal manual - GOV.UK (www.gov.uk)

This finally did the trick, she got an apology and £40 compensation due to the wait.

Wsb5tails

Thank you for that, gosh an 18 month wait for the tax relief due and just £40 for your troubles.
I will follow your guidance and keep everything crossed. An already 6 month wait on the return of £6250 at current interest rates is driving me on.
Congratulations on your persistence, it really shouldn't be that hard

xylophone

See this thread

https://forums.moneysavingexpert.com/discussion/6103498/railway-pension-scheme-website-brass-payments-tax/p2

and

https://forums.moneysavingexpert.com/discussion/5738860/teachers-pension-additional-pension

Wsb5tails

I wonder if someone would be kind enough to confirm the latest numbers provided by HMRC.  They're not what I thought but happy to be corrected.

Income £55388
Tax paid on above £9587.20
Tax Allowance £12570

£25000 payment made to Pension from Savings (therefore tax paid on receiving it as income) but Zero Tax Relief credited by the Pension Company or any other method.

They say I am due £6023.60 Tax relief i.e £5000 for the £25000 Pension Contribution at 20% basic rate plus £1023 for the element taxed at 40%.

However IF I had made this contribution from earnings where tax relief had been given at source or added by the Pension Company I understood the numbers would have been

£25000 gross contribution from me would attract relief at Basic Rate tax of £6250 plus a further £1023 as understood above for the 40% tax rate.

Am I wrong to have expected the £7273 relief (£6250 plus £1023) or do I loose out having made the Pension Contribution in this way. 

Could you confirm its me or them please?

Many thanks