Claim back 40% income tax on pension previous years?

handful
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I have a slightly different twist on a similar question about this. Can someone help with this scenario?

Annual salary : £60k
For each of the last 3 years I was making pension contributions of around 11k per year of which £8400 (after 20% TR) and the rest was employer and employee contributions

This year I have maxed out my contribution so it will be £60k for the year. I have received the 20% TR from my provider for my additional contribution for this year A colleague and I were just discussing this and although I know I can't pay any more into my pensions this year because of the cap but he thinks that because I paid some (not much) 40% tax in the last 3 years I should be able to offset that with my pension contributions this year? For info, my tax code is adjusted to give me the 20-40% relief for the regular contributions that I make and stated above but from what I can see I still paid some 40% tax each year.

So my questions are
1. Is this right?! And if so
2. Do I have to complete a tax return or will HMRC look back and do this automatically?
3. Is there anything I've missed?

TIA

Comments

  • lisyloo
    lisyloo Posts: 29,537
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    I don’t understand question 1. What does he think you can offset?
    you should be able to claim the 40% tax relief.

    2. if you mean claim back the tax relief you have to claim this. You would need to contact HMRC.
  • Veteransaver
    Veteransaver Posts: 333
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    edited 12 January at 1:44PM
    You should contact HMRC, you may have to submit tax returns for the 3 previous years

    You used to be able to carry back contributions, ie if say you had high rate income in a previous year, you could carry back and get the tax relief for contributions made in subsequent years but I think that stopped in 2007.

    So basically now you will only get the additional higher rate relief on contributions made in the same tax year

    But if you were a high rate taxpayer say in 2020 and didn't claim tax relief for 2020's contributions on the 2020 return, I think you should be able to effectively submit a "late" tax return for those years, though there will probably be some sort of time limit.

    Edit, I should add though that if they were employer scheme contributions then any relief would be automatic as part of your payslip calculations, it would only be contributions you made to an additional pension outside of that that you would be eligible for tax relief 

  • You should contact HMRC, you may have to submit tax returns for the 3 previous years

    You used to be able to carry back contributions, ie if say you had high rate income in a previous year, you could carry back and get the tax relief for contributions made in subsequent years but I think that stopped in 2007.

    So basically now you will only get the additional higher rate relief on contributions made in the same tax year

    But if you were a high rate taxpayer say in 2020 and didn't claim tax relief for 2020's contributions on the 2020 return, I think you should be able to effectively submit a "late" tax return for those years, though there will probably be some sort of time limit.

    Edit, I should add though that if they were employer scheme contributions then any relief would be automatic as part of your payslip calculations, it would only be contributions you made to an additional pension outside of that that you would be eligible for tax relief 

    You don’t submit ‘late returns’ but simply write to HMRC detailing pension paid and requesting a review of the relevant tax years. 2019/20 is the earliest year for which one can make a claim - by 5th April 2024.
  • handful
    handful Posts: 530
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    lisyloo said:
    I don’t understand question 1. What does he think you can offset?
    you should be able to claim the 40% tax relief.

    2. if you mean claim back the tax relief you have to claim this. You would need to contact HMRC.

    Sorry I probably haven't worded it very well! Basically I have got relief for 40% contributions to me pension for the contributions I have made to me SIPP by virtue of a tax code change. But havung checked the tax rate that I've paid on the taxable eIement of my pay, I have paid something like 24.5% which would indicate that I have paid "some" tax at 40%. As I have now paid in my maximum contribution for this year (£60k) I don't know if they will automatically look back and allocate some of that contribution to previous years and therefore take the earnings that I paid 40% tax on into account to take me out of HR tax completely? Does that make more sense?!
     
  • handful
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    edited 22 January at 2:51PM
    You should contact HMRC, you may have to submit tax returns for the 3 previous years

    You used to be able to carry back contributions, ie if say you had high rate income in a previous year, you could carry back and get the tax relief for contributions made in subsequent years but I think that stopped in 2007.

    So basically now you will only get the additional higher rate relief on contributions made in the same tax year

    But if you were a high rate taxpayer say in 2020 and didn't claim tax relief for 2020's contributions on the 2020 return, I think you should be able to effectively submit a "late" tax return for those years, though there will probably be some sort of time limit.

    Edit, I should add though that if they were employer scheme contributions then any relief would be automatic as part of your payslip calculations, it would only be contributions you made to an additional pension outside of that that you would be eligible for tax relief 

    You don’t submit ‘late returns’ but simply write to HMRC detailing pension paid and requesting a review of the relevant tax years. 2019/20 is the earliest year for which one can make a claim - by 5th April 2024.

    I did get relief through my post code for the value of the contributions that I've been making but from what I can tell still paid some 40% tax. can my contribution to this years pension be used to offset this tax that I paid?
  • [Deleted User]
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    edited 22 January at 2:51PM
    handful said:
    You should contact HMRC, you may have to submit tax returns for the 3 previous years

    You used to be able to carry back contributions, ie if say you had high rate income in a previous year, you could carry back and get the tax relief for contributions made in subsequent years but I think that stopped in 2007.

    So basically now you will only get the additional higher rate relief on contributions made in the same tax year

    But if you were a high rate taxpayer say in 2020 and didn't claim tax relief for 2020's contributions on the 2020 return, I think you should be able to effectively submit a "late" tax return for those years, though there will probably be some sort of time limit.

    Edit, I should add though that if they were employer scheme contributions then any relief would be automatic as part of your payslip calculations, it would only be contributions you made to an additional pension outside of that that you would be eligible for tax relief 

    You don’t submit ‘late returns’ but simply write to HMRC detailing pension paid and requesting a review of the relevant tax years. 2019/20 is the earliest year for which one can make a claim - by 5th April 2024.

    I did get relief through my post code for the value of the contributions that I've been making but from what I can tell still paid some 40% tax. can my contribution to this years pension be used to offset this tax that I paid?
    If you paid, for example, £12000 at the higher rate of tax and made a contribution of £8000 (grossed up to £10000), £2000 of your income would remain liable at 40%. 

    As stated previously, you can’t allocate contributions made in one year to another. 
  • lisyloo
    lisyloo Posts: 29,537
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    edited 22 January at 2:51PM
    handful said:
    purdyoaten2 said:
    You should contact HMRC, you may have to submit tax returns for the 3 previous years

    You used to be able to carry back contributions, ie if say you had high rate income in a previous year, you could carry back and get the tax relief for contributions made in subsequent years but I think that stopped in 2007.

    So basically now you will only get the additional higher rate relief on contributions made in the same tax year

    But if you were a high rate taxpayer say in 2020 and didn't claim tax relief for 2020's contributions on the 2020 return, I think you should be able to effectively submit a "late" tax return for those years, though there will probably be some sort of time limit.

    Edit, I should add though that if they were employer scheme contributions then any relief would be automatic as part of your payslip calculations, it would only be contributions you made to an additional pension outside of that that you would be eligible for tax relief 

    You don’t submit ‘late returns’ but simply write to HMRC detailing pension paid and requesting a review of the relevant tax years. 2019/20 is the earliest year for which one can make a claim - by 5th April 2024.

    I did get relief through my post code for the value of the contributions that I've been making but from what I can tell still paid some 40% tax. can my contribution to this years pension be used to offset this tax that I paid?
    I’m not sure how HMRC knew in advance what you’d be paying into your pension (it’s often a % of salary and therefore subject to pay rises),
    in theory if they knew the exact amount in advance and put it into your tax code then PAYE should have sorted it out.
    however if you increased your pension contribution at some point or your salary changed then the tax code would be out of date and you’d need to contact HMRC with the details to claim back the extra tax relief.
    personally I’d write a letter details the grossed up amount (including the 20% tax relief) for each year, 
  • handful
    handful Posts: 530
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    edited 22 January at 2:51PM
    lisyloo said:
    handful said:
    purdyoaten2 said:
    You should contact HMRC, you may have to submit tax returns for the 3 previous years

    You used to be able to carry back contributions, ie if say you had high rate income in a previous year, you could carry back and get the tax relief for contributions made in subsequent years but I think that stopped in 2007.

    So basically now you will only get the additional higher rate relief on contributions made in the same tax year

    But if you were a high rate taxpayer say in 2020 and didn't claim tax relief for 2020's contributions on the 2020 return, I think you should be able to effectively submit a "late" tax return for those years, though there will probably be some sort of time limit.

    Edit, I should add though that if they were employer scheme contributions then any relief would be automatic as part of your payslip calculations, it would only be contributions you made to an additional pension outside of that that you would be eligible for tax relief 

    You don’t submit ‘late returns’ but simply write to HMRC detailing pension paid and requesting a review of the relevant tax years. 2019/20 is the earliest year for which one can make a claim - by 5th April 2024.

    I did get relief through my post code for the value of the contributions that I've been making but from what I can tell still paid some 40% tax. can my contribution to this years pension be used to offset this tax that I paid?
    I’m not sure how HMRC knew in advance what you’d be paying into your pension (it’s often a % of salary and therefore subject to pay rises),
    in theory if they knew the exact amount in advance and put it into your tax code then PAYE should have sorted it out.
    however if you increased your pension contribution at some point or your salary changed then the tax code would be out of date and you’d need to contact HMRC with the details to claim back the extra tax relief.
    personally I’d write a letter details the grossed up amount (including the 20% tax relief) for each year, 
    The contributions I made into my SIPP were the same for about 3 years and I told them when I started to make contributions and they adjusted my tax code on that basis. My salary did rise by 3k a couple of years ago but I didn't increase these contributions, just paid more of my mortgage off. Therefore the issue may be that I've paying 40% tax on those £3k of earnings since the payrise? purdyoaten2 is suggesting I can't allocate any pension backwards so that I get a tax rebate for that HR tax though so if correct that answers my question.
    Thanks



  • [Deleted User]
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    edited 22 January at 2:51PM
    handful said:
    lisyloo said:
    handful said:
    purdyoaten2 said:
    You should contact HMRC, you may have to submit tax returns for the 3 previous years

    You used to be able to carry back contributions, ie if say you had high rate income in a previous year, you could carry back and get the tax relief for contributions made in subsequent years but I think that stopped in 2007.

    So basically now you will only get the additional higher rate relief on contributions made in the same tax year

    But if you were a high rate taxpayer say in 2020 and didn't claim tax relief for 2020's contributions on the 2020 return, I think you should be able to effectively submit a "late" tax return for those years, though there will probably be some sort of time limit.

    Edit, I should add though that if they were employer scheme contributions then any relief would be automatic as part of your payslip calculations, it would only be contributions you made to an additional pension outside of that that you would be eligible for tax relief 

    You don’t submit ‘late returns’ but simply write to HMRC detailing pension paid and requesting a review of the relevant tax years. 2019/20 is the earliest year for which one can make a claim - by 5th April 2024.

    I did get relief through my post code for the value of the contributions that I've been making but from what I can tell still paid some 40% tax. can my contribution to this years pension be used to offset this tax that I paid?
    I’m not sure how HMRC knew in advance what you’d be paying into your pension (it’s often a % of salary and therefore subject to pay rises),
    in theory if they knew the exact amount in advance and put it into your tax code then PAYE should have sorted it out.
    however if you increased your pension contribution at some point or your salary changed then the tax code would be out of date and you’d need to contact HMRC with the details to claim back the extra tax relief.
    personally I’d write a letter details the grossed up amount (including the 20% tax relief) for each year, 
    The contributions I made into my SIPP were the same for about 3 years and I told them when I started to make contributions and they adjusted my tax code on that basis. My salary did rise by 3k a couple of years ago but I didn't increase these contributions, just paid more of my mortgage off. Therefore the issue may be that I've paying 40% tax on those £3k of earnings since the payrise? purdyoaten2 is suggesting I can't allocate any pension backwards so that I get a tax rebate for that HR tax though so if correct that answers my question.
    Thanks



    That’s correct. While you have received the HR tax relief on the contributions paid you haven’t eliminated all HR tax in some years. Nothing can be done about this. 
  • lisyloo
    lisyloo Posts: 29,537
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    edited 12 January at 7:20PM
    It sounds like you’re not due any more tax relief I.e. your contributions didn’t entirely cover your 40% income
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