Claiming higher rate relief for additional contribution using online form

c_beam

Greetings, I made a one off contribution of £60k from my bank account to my workplace pension, HMRC advised I can write to claim higher rate relief but they also said I could try their online tool which has been mentioned recently on the forum.

Has anyone used the online form for a one off payment to a workplace scheme and if so what did you state as the amount paid in?  It says "This is the total net amount you have contributed to this pension in the selected tax year. You can find this amount on your payslip or on a letter from your employer." which would not cater for the one off payment.  Do I just add on the one off contribution?  Thanks.

Sarahspangles

I used the online form a couple of weeks ago, and it may have changed a bit since then as taxpayers are effectively testing it! I was claiming back higher rate tax on my SIPP contributions, but it was clear when I was entering contributions that I had already had relief on, that it was throwing off the calculation.

I assume your workplace pension is net pay, so you’ve had 20% relief on that already. You only need to tell them about the lump sum that hasn’t gone through your payslip/PAYE. Then see if the calculation on screen gives you the amount of relief you expect.

 https://forums.moneysavingexpert.com/discussion/6586855/hmrc-claim-personal-pension-tax-relief-beta

Albermarle

Sarahspangles said:

I used the online form a couple of weeks ago, and it may have changed a bit since then as taxpayers are effectively testing it! I was claiming back higher rate tax on my SIPP contributions, but it was clear when I was entering contributions that I had already had relief on, that it was throwing off the calculation.

I assume your workplace pension is net pay, so you’ve had 20% relief on that already. You only need to tell them about the lump sum that hasn’t gone through your payslip/PAYE. Then see if the calculation on screen gives you the amount of relief you expect.

 https://forums.moneysavingexpert.com/discussion/6586855/hmrc-claim-personal-pension-tax-relief-beta

Presuming that the OP is a higher earner/40% taxpayer. So if they make pension contributions at work via net pay, they will have had the full 40% relief on those.

OP - Presume if you are already making contributions via work AND you want to claim higher rate relief on £60K , you must be earning significantly North of £100k pa ?
Not being nosy, it is just we often see a lot of misunderstanding and confusion in this area.

Sarahspangles

Albermarle said:

Presuming that the OP is a higher earner/40% taxpayer. So if they make pension contributions at work via net pay, they will have had the full 40% relief on those.

Is that correct? My NHS pension is net pay, but I have had to reclaim the higher rate tax I pay through PAYE after making SIPP contributions that increased my basic rate band. I thought only salary sacrifice had the effect of avoiding the higher rate tax in the first place.

Dazed_and_C0nfused

Sarahspangles said:

Albermarle said:

Presuming that the OP is a higher earner/40% taxpayer. So if they make pension contributions at work via net pay, they will have had the full 40% relief on those.

Is that correct? My NHS pension is net pay, but I have had to reclaim the higher rate tax I pay through PAYE after making SIPP contributions that increased my basic rate band. I thought only salary sacrifice had the effect of avoiding the higher rate tax in the first place.

No, you always receive the maximum relief via net pay contributions.  There is never anything extra to claim.

c_beam

Thanks so far, I'm higher rate taxpayer and contributions were deducted by my employer so I should have nothing to claim there just the lump sum.  Redundancy payment is why so high this tax year.  And I have carry forward allowance I will use.

Dazed_and_C0nfused

c_beam said:

Thanks so far, I'm higher rate taxpayer and contributions were deducted by my employer so I should have nothing to claim there just the lump sum.  Redundancy payment is why so high this tax year.  And I have carry forward allowance I will use.

You can only get to the right answer if you understand the method being used.

If it is net pay or salary sacrifice there is nothing else for you to claim.

Normally only relief at source contributions required any extra contact with HMRC.  

The, not very common, exception is where you make a gross payment outside of payroll where tax relief cannot be given.  This is most often associated with public sector DB schemes.

Albermarle

Sarahspangles said:

Albermarle said:

Presuming that the OP is a higher earner/40% taxpayer. So if they make pension contributions at work via net pay, they will have had the full 40% relief on those.

Is that correct? My NHS pension is net pay, but I have had to reclaim the higher rate tax I pay through PAYE after making SIPP contributions that increased my basic rate band. I thought only salary sacrifice had the effect of avoiding the higher rate tax in the first place.

The terminology can be confusing.
Net pay to most people means your after tax /take home pay.
However net pay pension contributions come out of your pay before tax. So if you are a 40% taxpayer you automatically get the 40% relief by not paying the 40% tax in the first place.

Sarahspangles

Dazed_and_C0nfused said:

Sarahspangles said:

Albermarle said:

Presuming that the OP is a higher earner/40% taxpayer. So if they make pension contributions at work via net pay, they will have had the full 40% relief on those.

Is that correct? My NHS pension is net pay, but I have had to reclaim the higher rate tax I pay through PAYE after making SIPP contributions that increased my basic rate band. I thought only salary sacrifice had the effect of avoiding the higher rate tax in the first place.

No, you always receive the maximum relief via net pay contributions.  There is never anything extra to claim.

Thanks - what was confusing me is that my SIPP is relief at source but the higher rate tax is paid via payroll. I clearly need to retire….

c_beam

Dazed_and_C0nfused said:

If it is net pay or salary sacrifice there is nothing else for you to claim.

Normally only relief at source contributions required any extra contact with HMRC.  

It was both - salary sacrifice up until I was made redundant, then relief at source for the lump sum payment from my bank account.  So my question was what do I enter for the amount paid in on the new online form? Both or only the relief at source amount.  Or just write to them and forget about the new form.

Dazed_and_C0nfused

c_beam said:

Dazed_and_C0nfused said:

If it is net pay or salary sacrifice there is nothing else for you to claim.

Normally only relief at source contributions required any extra contact with HMRC.  

It was both - salary sacrifice up until I was made redundant, then relief at source for the lump sum payment from my bank account.  So my question was what do I enter for the amount paid in on the new online form? Both or only the relief at source amount.  Or just write to them and forget about the new form.

You don't need to tell HMRC about salary sacrifice contributions because they are of no interest to HMRC.

Salary sacrifice means your employer adds more to your pension and you are not entitled to any tax relief on employer contributions.

Just tell HMRC about the relief at source contributions.  

No idea why HMRC couldn't make that clearer to be honest.