How to claim the higher rate tax back on pension contributions?

dllive

Hi

Ive paid £10k into a Vanguard SIPP. Im higher rate tax payer. Vanguard has claimed back the basic rate tax relief.

Do I need to claim the higher rate part back on my self assessment? Is there a box somewhere I enter in my pension contribution and they automatically deduct it?

Thanks

Albermarle

Same question asked ( and answered ) yesterday.
SIPP and tax relief — MoneySavingExpert Forum

Dazed_and_C0nfused

dllive said:

Hi

Ive paid £10k into a Vanguard SIPP. Im higher rate tax payer. Vanguard has claimed back the basic rate tax relief.

Do I need to claim the higher rate part back on my self assessment? Is there a box somewhere I enter in my pension contribution and they automatically deduct it?

Thanks

If you already complete a Self Assessment return then yes, you include the RAS pension contribution on your return.

There is no deducting though that you would see as RAS contributions don't reduce your taxable income.

They increase your basic rate band so more income can be taxed at 20% and less at 40%.

They also reduce your adjusted net income so any HICBC could be less and tapering of the Personal Allowance could also be less but you only get to see the end result I think, not the more detailed calculation of how these amounts are arrived at.

dllive

Great, thanks @Dazed_and_C0nfused

retiringtoosoon

I paid £2k into my work’s pension scheme back in march 2022 and received no tax relief. I believe my personal allowance should be increased by this amount? I can’t get hold of hmrc for love nor money. Any advise!

jem16

retiringtoosoon said:

I paid £2k into my work’s pension scheme back in march 2022 and received no tax relief. I believe my personal allowance should be increased by this amount? I can’t get hold of hmrc for love nor money. Any advise!

All depends on the type of scheme you are paying into. If it’s a net pay arrangement - ie contributions are made before tax is taken off - then you already have the full tax relief and no more is due. If it’s Relief At Source arrangement then yes you will need to contact HMRC. Try at 8am. 

Dazed_and_C0nfused

retiringtoosoon said:

I paid £2k into my work’s pension scheme back in march 2022 and received no tax relief. I believe my personal allowance should be increased by this amount? I can’t get hold of hmrc for love nor money. Any advise!

You cannot have a greater Personal Allowance than £12,570 but occasionally pension contributions can be paid gross with no tax relief which aren't "net pay" contributions.

Do you know why no tax relief was added?  Was this a lum sum payment to buy additional pension in a DB scheme?

How much tax did you pay in the 2021-22 tax year?

retiringtoosoon

jem16 said:

retiringtoosoon said:

I paid £2k into my work’s pension scheme back in march 2022 and received no tax relief. I believe my personal allowance should be increased by this amount? I can’t get hold of hmrc for love nor money. Any advise!

All depends on the type of scheme you are paying into. If it’s a net pay arrangement - ie contributions are made before tax is taken off - then you already have the full tax relief and no more is due. If it’s Relief At Source arrangement then yes you will need to contact HMRC. Try at 8am. 

No, no tax relief was received on my payment. I paid the amount in from savings.

My plan was to get my taxable income down below higher rate threshold. But can’t get them to recognise that. I’ll try again Monday first thing again….

Dazed_and_C0nfused

retiringtoosoon said:

jem16 said:

retiringtoosoon said:

I paid £2k into my work’s pension scheme back in march 2022 and received no tax relief. I believe my personal allowance should be increased by this amount? I can’t get hold of hmrc for love nor money. Any advise!

All depends on the type of scheme you are paying into. If it’s a net pay arrangement - ie contributions are made before tax is taken off - then you already have the full tax relief and no more is due. If it’s Relief At Source arrangement then yes you will need to contact HMRC. Try at 8am. 

No, no tax relief was received on my payment. I paid the amount in from savings.

My plan was to get my taxable income down below higher rate threshold. But can’t get them to recognise that. I’ll try again Monday first thing again….

You are highly unlikely to be able to persuade HMRC of the position as you see it without a better understanding of what you've done.

Was it a lump sum contribution to a DB scheme?

retiringtoosoon

Dazed_and_C0nfused said:

retiringtoosoon said:

jem16 said:

retiringtoosoon said:

I paid £2k into my work’s pension scheme back in march 2022 and received no tax relief. I believe my personal allowance should be increased by this amount? I can’t get hold of hmrc for love nor money. Any advise!

All depends on the type of scheme you are paying into. If it’s a net pay arrangement - ie contributions are made before tax is taken off - then you already have the full tax relief and no more is due. If it’s Relief At Source arrangement then yes you will need to contact HMRC. Try at 8am. 

No, no tax relief was received on my payment. I paid the amount in from savings.

My plan was to get my taxable income down below higher rate threshold. But can’t get them to recognise that. I’ll try again Monday first thing again….

You are highly unlikely to be able to persuade HMRC of the position as you see it without a better understanding of what you've done.

Was it a lump sum contribution to a DB scheme?

No, i was moving between employers at the time. Only ever had DC schemes. As i was approaching the end of the tax year i was nearing higher rate tax bands so i made a one off contribution into my old employer scheme of £2k.

Dazed_and_C0nfused

I don't think you'll find it easy to get tax relief on that.

It's very unusual to make a personal contribution without getting basic rate tax relief.  Do you have a statement covering the next couple of months when, with a lot of providers, the basic rate tax relief would have been added?

HMRC don't seem to see what you've apparently done as a valid option.

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm044230