NHS pension - Tax relief on additional payments

mrkds

Oppenheimer said:

Easy to do.  I do not do Self Assessment (as taxed all under PAYE) and submitted a letter and evidence to HMRC part way through the tax year.  HMRC processed it no problem and I got a nice tax rebate about 6 weeks after the end of the tax year.  Feel free to use this letter template which I used and worked.  Repaying the favour as other posters in the Forum have help me over the years!

Thanks fantastic! Thanks so much! Makes things a lot easier. 

I'm not sure how to get my pension tax certificate though (i never heard of this before). I'm trying to find it on the TRS, i can find my pension statement, but not a tax certificate. Am i looking in the right place? 

Oppenheimer

mrkds said:

Oppenheimer said:

Easy to do.  I do not do Self Assessment (as taxed all under PAYE) and submitted a letter and evidence to HMRC part way through the tax year.  HMRC processed it no problem and I got a nice tax rebate about 6 weeks after the end of the tax year.  Feel free to use this letter template which I used and worked.  Repaying the favour as other posters in the Forum have help me over the years!

Thanks fantastic! Thanks so much! Makes things a lot easier. 

I'm not sure how to get my pension tax certificate though (i never heard of this before). I'm trying to find it on the TRS, i can find my pension statement, but not a tax certificate. Am i looking in the right place? 

You should have received some form of official confirmation from NHS Pension Scheme to say thanks mrkds for your payment of x received on y and that this has purchased you additional pension z?

mrkds

Oppenheimer said:

You should have received some form of official confirmation from NHS Pension Scheme to say thanks mrkds for your payment of x received on y and that this has purchased you additional pension z?

Ah yes i recall getting a letter along those lines. I'll dig it out. Thanks again! 

mrkds

Oppenheimer said:

Shame we have to do it the old fashioned way - but it works!

Its ok - i think its quite quaint!

Whats more annoying is the lack of clarity about the process for those who don't do assessment, and that there doesn't seem to be much consistency in how HMRC deal with these requests. 

In think in future  I will only do APs by instalments - it seems to involve a lot less faff!

Dazed_and_C0nfused

mrkds said:

Oppenheimer said:

Shame we have to do it the old fashioned way - but it works!

Its ok - i think its quite quaint!

Whats more annoying is the lack of clarity about the process for those who don't do assessment, and that there doesn't seem to be much consistency in how HMRC deal with these requests. 

In think in future  I will only do APs by instalments - it seems to involve a lot less faff!

And you receive the tax saving immediately each pay day, not months later 😀

Sarahspangles

mrkds said:

Oppenheimer said:

Shame we have to do it the old fashioned way - but it works!

Its ok - i think its quite quaint!

Whats more annoying is the lack of clarity about the process for those who don't do assessment, and that there doesn't seem to be much consistency in how HMRC deal with these requests. 

In think in future  I will only do APs by instalments - it seems to involve a lot less faff!

It’s the same to reclaim higher rate tax on SIPP contributions. I can’t be the only person with a stock of envelopes that no longer self seal!

The most ‘legacy’ process I’ve found is to register an EPA, which are still valid if made before LPAs were brought in. You have to pay by cheque!

Oppenheimer

I hope I have this phrase right.

Making a lump sum additional pension payment into a defined benefit scheme outwith payroll is not common but its not uncommon.

When it happens nobody really knows how to deal with the tax relief (including HMRC!!!!!!!!) if you are outwith the self assessment process - and you don't want to sign up to self assessment because I think it is quite hard to get off this regime when started.

Anyways, just my thoughts and wee contribution for today.

Sarahspangles

@Oppenheimer it’s one of a series of transactions where following the links on their website to find out what you need to do just loop you round without an answer. Even ‘just write to us’ would help. Especially if it was an online form  

Oppenheimer

Dazed_and_C0nfused said:

hugheskevi said:

Oppenheimer said:

A couple of things to bear in mind/heads up for:

• depending on whose desk within HMRC your letter lands on, it will either be processed right or wrong - over the years I made two separate additional pension lump sums - the first time it was processed no problem, the second time it took them three attempts to process it right and I have to educate and chase them up (the following point might helps with this)
• the NHS calls it an Additional Payment (or whatever) the HMRC refers to this as Retirement Annuity Payment (this is VERY important) - if you speak to HMRC say it is a Retirement Annuity Payment which should be deducted from your taxable income.

Given you are talking about the last tax year I would expect you to get a refund within weeks.

Good luck.

I would not say it is a Retirement Annuity Contract payment. That was a pre-1988 pension arrangement that happens to have the same tax relief treatment and so HMRC in their PAYE space use the same codings.

But a RAC is a completely different type of pension contribution to an Added Pension lump sum payment with no tax relief added, and there is a separate option for a RAC on self-assessment - if you were to fill it in as a RAC contribution on self-assessment it would trigger investigations. Presumably that is because self-assessment is a more modern system.

I agree, don't refer to it as a Retirement annuity contract/payment.

They ceased for new policies in 1988.

HMRC may use it on their system but that is not the type of contribution you have made and could well confuse/complicate things.

I bow to my learned friends knowledge.

I can't comment on the technical and historical definition of Retirement Annuity Payment from the 1980s but HMRC says this is the definition and application in 2024 - and when I look at it, it is a Retirement Annuity Payment.

Either way, as long as mrkds gets their tax relief - which they will.

Dazed_and_C0nfused

Oppenheimer said:

Dazed_and_C0nfused said:

hugheskevi said:

Oppenheimer said:

A couple of things to bear in mind/heads up for:

• depending on whose desk within HMRC your letter lands on, it will either be processed right or wrong - over the years I made two separate additional pension lump sums - the first time it was processed no problem, the second time it took them three attempts to process it right and I have to educate and chase them up (the following point might helps with this)
• the NHS calls it an Additional Payment (or whatever) the HMRC refers to this as Retirement Annuity Payment (this is VERY important) - if you speak to HMRC say it is a Retirement Annuity Payment which should be deducted from your taxable income.

Given you are talking about the last tax year I would expect you to get a refund within weeks.

Good luck.

I would not say it is a Retirement Annuity Contract payment. That was a pre-1988 pension arrangement that happens to have the same tax relief treatment and so HMRC in their PAYE space use the same codings.

But a RAC is a completely different type of pension contribution to an Added Pension lump sum payment with no tax relief added, and there is a separate option for a RAC on self-assessment - if you were to fill it in as a RAC contribution on self-assessment it would trigger investigations. Presumably that is because self-assessment is a more modern system.

I agree, don't refer to it as a Retirement annuity contract/payment.

They ceased for new policies in 1988.

HMRC may use it on their system but that is not the type of contribution you have made and could well confuse/complicate things.

I bow to my learned friends knowledge.

I can't comment on the technical and historical definition of Retirement Annuity Payment from the 1980s but HMRC says this is the definition and application in 2024 - and when I look at it, it is a Retirement Annuity Payment.

Either way, as long as mrkds gets their tax relief - which they will.

I think you will find that that is simply the way they choose to allow the appropriate tax relief.

A retirement annuity pension contribution is something specifically relating to a type of policy that could only be started up to 1988.  

HMRC using that descriptor when allowing relief is one thing but the op referring to their contributing as retirement annuity payment is only likely to cause even more confusion than these types of contribution already cause (at HMRC's end of things).