Self assessment and pension plans

Carr0t

Hopefully this is the best place to ask - I'm doing my self-assessment tax return and getting confused by the bit about pensions.

I have a pension through the small company I work for. They really need to overhaul it, but for the time being, it's _not_ salary sacrifice and it _is_ relief at source. They take money from my salary post-tax (So I have been told by our head of finance), pay it to the provider (Nest), then I get what's left (after nat ins yadda yadda). The provider tops it up 20%. On my account with the provider I see my payments, the RaS top up, and my employer's payments, all listed individually.

I also have a personal pension that I pay directly into, which is also relief at source and is of course post-tax.

Part of the reason I do self-assessment is because I'm in the 40% tax bracket, and want to claim the rest. 

Now on the self assessment form there are 2 relevant boxes. One for "Payments to registered payment schemes where basic rate tax relief will be claimed by your provider (relief at source). Enter the payments and basic rate tax". I _know_ I need to sum all the payments and relief I put through my personal pension and fill it in there.

The other potentially relevant box is "Payments to your employer's scheme which were not deducted from your pay before tax", the notes for which say "if _no_ tax relief was given at the time of payment. Do not include personal contributions that had relief at source".

So, do I put my work pension payments in there or not? If so, do I include the RaS 20% or no? It _seems_ pretty clear-cut no, but if I don't put them in there at all do I put them in the first box because they were relief at source? I want to make sure I get the tax benefit, but not get in trouble for doing it wrong...

Dazed_and_C0nfused

Carr0t said:

Hopefully this is the best place to ask - I'm doing my self-assessment tax return and getting confused by the bit about pensions.

I have a pension through the small company I work for. They really need to overhaul it, but for the time being, it's _not_ salary sacrifice and it _is_ relief at source. They take money from my salary post-tax (So I have been told by our head of finance), pay it to the provider (Nest), then I get what's left (after nat ins yadda yadda). The provider tops it up 20%. On my account with the provider I see my payments, the RaS top up, and my employer's payments, all listed individually.

I also have a personal pension that I pay directly into, which is also relief at source and is of course post-tax.

Part of the reason I do self-assessment is because I'm in the 40% tax bracket, and want to claim the rest. 

Now on the self assessment form there are 2 relevant boxes. One for "Payments to registered payment schemes where basic rate tax relief will be claimed by your provider (relief at source). Enter the payments and basic rate tax". I _know_ I need to sum all the payments and relief I put through my personal pension and fill it in there.

The other potentially relevant box is "Payments to your employer's scheme which were not deducted from your pay before tax", the notes for which say "if _no_ tax relief was given at the time of payment. Do not include personal contributions that had relief at source".

So, do I put my work pension payments in there or not? If so, do I include the RaS 20% or no? It _seems_ pretty clear-cut no, but if I don't put them in there at all do I put them in the first box because they were relief at source? I want to make sure I get the tax benefit, but not get in trouble for doing it wrong...

Why aren't you putting them in the same box 🤔

And you will find that the provider is adding 25%, not 20%.  This equates to 20% of the gross contribution.

Carr0t

Carr0t said:

They take money from my salary post-tax (So I have been told by our head of finance)

I just realised this makes it sound like almost exactly the opposite of what I intended, and I don't seem to be able to edit my post. The amount I need to pay in to hit the 5% minimum is calculated _pre_ any tax going out. If I take the amount between the top of my personal tax-free allowance and the bottom of where my rate goes up to 40%, take 5% of that, and then divide by 12 to get the monthly amount, that matches what is taken from my salary into my pension by my employer.

Dazed_and_C0nfused

Carr0t said:

Carr0t said:

They take money from my salary post-tax (So I have been told by our head of finance)

I just realised this makes it sound like almost exactly the opposite of what I intended, and I don't seem to be able to edit my post. The amount I need to pay in to hit the 5% minimum is calculated _pre_ any tax going out. If I take the amount between the top of my personal tax-free allowance and the bottom of where my rate goes up to 40%, take 5% of that, and then divide by 12 to get the monthly amount, that matches what is taken from my salary into my pension by my employer.

You need to understand the method being used.

One of,

Relief at source
Net pay
Salary sacrifice

Only then can you complete your tax return correctly.

The only method which has pension tax relief added to your pension fund is relief at source.

Carr0t

Dazed_and_C0nfused said:

Why aren't you putting them in the same box 🤔

And you will find that the provider is adding 25%, not 20%.  This equates to 20% of the gross contribution.

Yeah, that's what I meant, sorry. 20% of the eventual total, so 25% of what I originally put in.

As to why they're not in the same box, no one has gone through the faff of opting out of my workplace scheme currently, and I don't fancy being the first to try and go through that process. Especially because an overhaul is apparently on the cards Soon™️ and it might be more attractive then. But my previous employer was much bigger, with a much nicer scheme, so I have just continued to pay into that privately after leaving.

I also have one from before that when I was working at a University, which is a final-salary scheme (I don't believe it is any _more_, but all of my contributions were counted as such), so I understand I'm much better off leaving that as-is than transferring it. But as far as I can tell I can't make additional contributions to that now I've left the Uni.

Dazed_and_C0nfused

As to why they're not in the same box...

Your opening post explained they both used the same method, that was why the question was asked in my post.

Carr0t

Dazed_and_C0nfused said:

One of,

Relief at source
Net pay
Salary sacrifice

The only method which has pension tax relief added to your pension fund is relief at source.

It must be relief at source then. I'm getting myself all tied in knots trying to accurately describe what leaves my salary and when (as shown on my payslip), but what I _can_ say confidently is that my payslip has a line item for:

- Pensions: £XXX.YY

And then if I log into Nest and look at the same month I see:
- From your salary: the same £XXX.YY as on my payslip

- Less contribution charge: ~1.79% of £XXX.YY

- Tax relief: exactly 25% of £XXX.YY

- Less contribution charge on tax relief: the same ~1.79%, of the tax relief this time
- Amount invested: salary contribution + tax relief - both contribution charges
Plus a separate entry for "From your employer", with the same contribution charge % but nothing about tax relief.

But I still don't know which box of my self assessment, if any, I should put the amount going to that pension scheme into.

Dazed_and_C0nfused

Carr0t said:

Dazed_and_C0nfused said:

One of,

Relief at source
Net pay
Salary sacrifice

The only method which has pension tax relief added to your pension fund is relief at source.

It must be relief at source then. I'm getting myself all tied in knots trying to accurately describe what leaves my salary and when (as shown on my payslip), but what I _can_ say confidently is that my payslip has a line item for:

- Pensions: £XXX.YY

And then if I log into Nest and look at the same month I see:
- From your salary: the same £XXX.YY as on my payslip

- Less contribution charge: ~1.79% of £XXX.YY

- Tax relief: exactly 25% of £XXX.YY

- Less contribution charge on tax relief: the same ~1.79%, of the tax relief this time
- Amount invested: salary contribution + tax relief - both contribution charges
Plus a separate entry for "From your employer", with the same contribution charge % but nothing about tax relief.

But I still don't know which box of my self assessment, if any, I should put the amount going to that pension scheme into.

But you said this in your opening post,

Now on the self assessment form there are 2 relevant boxes. One for "Payments to registered payment schemes where basic rate tax relief will be claimed by your provider (relief at source). Enter the payments and basic rate tax". I _know_ I need to sum all the payments and relief I put through my personal pension and fill it in there.

Marcon

Carr0t said:

Plus a separate entry for "From your employer", with the same contribution charge % but nothing about tax relief.

Employer contributions are always paid gross. The employer (normally) gets corporation tax relief on them as a trading expense.