DB Pension Plus DC Pension

daparojo

I currently have a DB Pension which I have been in for 27 years. To take advantage of the increase in the LTA, I set up a DC Pension where a contribute a monthly amount, and I get the standard 20% tax added.
As I am a higher rate tax payer, I will need to complete a Self Assessment next year to claim the extra 20% tax. 
So here is my question. On the Self Assessment form, I can easily add what I have contributed to the DC Pension, however, what information will I need from the DB Pension to complete the form ?

Many thanks

Dazed_and_C0nfused

There is no "extra 20%", the higher rate relief depends on your overall tax position.  You might contribute say £20k and only be paying higher rate tax on £1.

Why do you think you need to file a tax return?

QrizB

Have you been under Self Assessment previously?

I don't think you need to commence SA solely as a result of contributing to a RAS DC pension. Others have said you can report it via your personal tax account.

See for example this post:

There are two normal ways interacting with the HMRC for individuals - self assessment (although it's not really for those with standard PAYE tax affairs - but claiming back pension tax relief is still one of the suggested uses) and your personal tax account (most people ignored the letters about this years ago - and didn't sign up for access).

daparojo

I was under the assumption as a higher tax payer, you got tax relief at 40% ? 20% that is added  to your contribution by the DC provider via the Inland Revenue, and then the extra 20% relief that you claim back through self assessment ? Is this not the case ?

I have not completed a Self Assessment before hence asking for guidance.

jem16

daparojo said:

I was under the assumption as a higher tax payer, you got tax relief at 40% ? 20% that is added  to your contribution by the DC provider via the Inland Revenue, and then the extra 20% relief that you claim back through self assessment ? Is this not the case ?

I have not completed a Self Assessment before hence asking for guidance.

It is the case that you can apply for the extra tax relief. However how much extra tax relief you will get will depend on how much income you have being taxed at 40%. If you made a pension contribution of £10k and you were paying higher rate tax on £10k then you would get the full 20% tax relief. However if you made the same £10k contribution but were only paying higher rate tax on £1k then you would only get the extra 20% on the £1k and not the whole contribution.

As to SA, if you already complete one then yes you can apply for your tax relief that way. However if you don't already complete one then there is no need to do so as you simply inform HMRC via your Personal Tax account or by phone.

Your DB pension will normally be done via the net pay arrangement so no need to add it anywhere on the SA form.

Dazed_and_C0nfused

daparojo said:

I was under the assumption as a higher tax payer, you got tax relief at 40% ? 20% that is added  to your contribution by the DC provider via the Inland Revenue, and then the extra 20% relief that you claim back through self assessment ? Is this not the case ?

I have not completed a Self Assessment before hence asking for guidance.

What @jem16 said 😃.

There is no extra 20%, the amount depends on each individuals tax position.

When you make RAS contributions the provider will add 25% of your net contribution (which is 20% of the gross contribution).

The gross contribution then increases your basic rate band meaning more income can be taxed at 20% and less at 40%.

There can be other tax saving benefits as well, you might become eligible for Marriage Allowance or have an increased savings nil rate band (aka Personal Savings Allowance) to name a couple.

I don't know where you've seen that a Self Assessment return is necessary but unless some other criteria exists then making pension contributions and being liable to higher rate tax isn't a reason to file a tax return.

daparojo

Many thanks for your support. It will be the full 20% due to my earnings I should be able to claim back.
Regards Self Assessment, as I am paying the DC myself, and the company that I am using are claiming the Basic 20% level, how does the Inland Revenue know to give the further 20% (40%) relief back to me if I do not complete a Self Assessment.
I guess they will know that I paying into a DB and DC Scheme due to the Tax Relief claimed - but do I need to do something to reclaim the relief back from April 2024 ? And is this normally paid as Tax Code adjustment on my Salary ?
Sorry for the many questions.

jem16

daparojo said:

Many thanks for your support. It will be the full 20% due to my earnings I should be able to claim back.
Regards Self Assessment, as I am paying the DC myself, and the company that I am using are claiming the Basic 20% level, how does the Inland Revenue know to give the further 20% (40%) relief back to me if I do not complete a Self Assessment.
I guess they will know that I paying into a DB and DC Scheme due to the Tax Relief claimed - but do I need to do something to reclaim the relief back from April 2024 ? And is this normally paid as Tax Code adjustment on my Salary ?
Sorry for the many questions.

HMRC will not know unless you actually inform them that you want to claim higher rate tax relief on your DC pension contributions. 

You either inform them by phoning them or by adding the information via your Personal Tax Account online. They will then adjust your tax code. 

Dazed_and_C0nfused

You just need to provide HMRC with the details of the pension contribution - make it crystal clear it's a RAS contribution and what the net and gross amounts are.

If you tell them during the tax year then they will make a provisional tax code adjustment and review things after the tax year ends.

If you tell them after the tax year has ended they will review the tax paid and send you a refund of any overpaid tax.

Once you have told them they will usually update your tax code going forward so you get the tax relief via an increased tax code 

You will need to keep HMRC informed of any changes to the contributions (they need to know the annual amount, not each and every individual change).