claim tax relief on pension: impossible! I need a professional...

Oranda

Hi

If it helps the OP, below is a copy of a letter (some items redacted) that I sent to HMRC to claim additional tax relief for the 3 years when I qualified for higher rate relief.

It was back in 2020 so their process may have changed since then. But, they didn't ask for any additional information, and I received payment within a few weeks of sending the letter.

The contribution start date I entered was when I started contributing to the pension (i.e. pension scheme start date, not just for the tax year that I was claiming for), and the Gross contributions Paid that I entered was my personal contribution plus the 25% that pension provider had claimed from HMRC. Maybe not corect BUT, HMRC seemed happy with the information that I provided.

=============================

Dear Sir/Madam

Ref: Higher rate tax relief on personal pension contributions – UTR <nnnnnnnnn>

I have just found out that I am able to claim for higher rate tax relief on personal pension contributions, and believe I may do this as higher rate tax payer for tax years 2019-20, 2018-19 and 2017-18.

I believe that you require the following information for each of the tax years in support of my claim:

Tax Year 6 Apr 19 to 5 Apr 20	Contribution Start Date	Gross Contributions Paid
Aviva - <Policy Number>
Scottish Widows - <Policy Number>
Aegon - <Policy Number>
Total for Tax Year 19/20

Tax Year 6 Apr 18 to 5 Apr 19	Contribution Start Date	Gross Contributions Paid
Aviva - <Policy Number>
Scottish Widows - <Policy Number>
Aegon - <Policy Number>
Total for Tax Year 18/19

Tax Year 6 Apr 17 to 5 Apr 18	Contribution Start Date	Gross Contributions Paid
Aviva - <Policy Number>
Scottish Widows - <Policy Number>
Aegon - <Policy Number>
Total for Tax Year 17/18

Please could you look into this for me at your earliest convenience, and let me know if there is any further information that you require.

Yours faithfully,

DRS1

I think they have tightened up on when you need to supply evidence. It used to be where you contributed more than £10k but I think it is for lower contributions now.

bjorn_toby_wilde

https://forums.moneysavingexpert.com/discussion/comment/81876297#Comment_81876297

Agreed.

When I last claimed they required a copy of my pension statement. Pretty sure that was all they needed though.

jimjames

Would it be quicker to just submit a self assessment tax return? Tax due will then be calculated automatically

loukitten

Thanks again for your patience…

I am claiming for the last 3 years because I made an extra contribution (relief at source) in each of thee years. I didn't know that I was due more tax relief, that's why I am doing it now.

I have 2 pension providers because I have changed my job, both on salary sacrifice, but the 3 one-off contributions have been deposited in the old pension provider only.

the first year I also used "carry forward", so that amount is a bit higher.

In the HMRC form I've added all the documents for both pensions, although the extra one-off contributions appear in just one.

hara____

Maybe I've misunderstood, but why attach the documents for both pensions if you are only claiming tax relief on one of them?

Marcon

https://forums.moneysavingexpert.com/discussion/comment/81879738#Comment_81879738

Points to check, all based on issues which have caused endless confusion to others, so might or might not be relevant to you:

• You had sufficient earnings to cover any personal contributions you made (ie anything you personally paid either by bank transfer from your savings account, or by monthly deduction from your salary). You've mentioned salary sacrifice; the correct starting point to check if you had 'sufficient earnings' is your gross post-sacrifice salary (NOT any 'notional salary' your employer might have used for, say, death in service life insurance).
• If your 3 'top up' contributions were all paid by bank transfer from your savings account to a Relief at Source scheme, did you pay enough higher rate tax during the relevant tax year(s) in which payment was made to cover these? Taking a really basic numerical example to ensure the meaning is clear, if you paid higher rate tax on £900 of your income during a tax year and contributed £2,000 as a personal contribution to a pension scheme, you can only claim higher rate tax on £900 (the remaining £1,100 would only get basic rate relief).
• You aren't trying to claim higher rate relief on contributions made by salary sacrifice. They are technically employer contributions so are paid gross and there's no tax for you to reclaim.
• The fact that the annual allowance was only £40K in the tax year 22/23 (not £60K - it rose to that from 23/24 on) isn't having any impact, depending on how much you paid in during that tax year, assuming that's the year when you utilised carry forward
• Your earnings aren't high enough to be the cause of the confusion: https://adviser.royallondon.com/technical-central/pensions/contributions-and-tax-relief/tapering-of-annual-allowance-for-high-incomes/

Assuming a clean bill of health to all the above, I'd give MoneyHelper a call, or contact them using their contact form/webchat: https://www.moneyhelper.org.uk/en/pensions-and-retirement/tax-and-pensions

They are there to give free assistance to members of the public who have pensions-related queries and/or are having problems with their pension, and I'd expect them to be able to clarify how best to proceed.

If you are still chewing the carpet after trying that route, any competent financial adviser (independent or otherwise) should be able to help for a fee - but it seems quite wrong to me that you should have to pay to sort out what ought to be a relatively straightforward enquiry, as opposed the saga it has obviously become.

loukitten

@hara____ in the tax relief claim form they say they want, for each tax year I'm claiming for, "details of the pension contributions paid and the tax year they relate to".

So because I'm having regular pension contributions (salary sacrifice) into my work pension provider, but I have transferred a one-off payment into the previous pension provider, I have added all the documents relative to both my pension providers.

@Marcon:

- Sorry I don't understand the first point… sufficient earnings to "cover"? Do you mean if my salary was high enough to include the tax-free amount that I deposited?
I should have done that calculation when I first deposited, I made sure I was under the allowance that I believe was 60K or your annual earnings. As I said the first year I used the "carry forward" though, so that year it might have gone higher than my annual salary. I have included all the pension contributions (also the regular ones from my salary) in that calculation

- I have a question on point 2 as well, why do you say "Relief at source" scheme? I have added a one-off contribution via bank transfer to a pension provider that WAS used as a workplace pension with salary sacrifice. Does this become a "relief at source" scheme? I don't understand how this works… is this linked to the pension scheme, to the employer, or to the pension contribution? Also the letter from HMRC asks if my pensions contributions are taken from my pay before tax, and being salary sacrifice this should be correct, but I don't know how they want me to prove it.
Anyway in terms of paying enough higher rate to cover that, I might not cover ALL of it, I'm not sure, but there's nothing in the form that asks me to check that, they only want to know if I was a higher tax payer in those years. I'd assume that the proper calculation of how much relief I can get is part of their job, isn't it?

- I'm claiming only for the contributions I've added myself, but who know what they are understanding…!

- I'm claiming from 23-24

- no, my earnings are not that high


Thanks again for your help, I'll give MoneyHelper a go.

As for the financial advisor, as mentioned I've applied on Unbiased and no on replied so I'm a bit worried that I won't find a professional…

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81884436#Comment_81884436

Personally I think you are making a mistake by referring to salary sacrifice contributions.

They aren't pension contributions you have made and as you are not entitled to any pension tax relief on them

They are employer contributions, which they have made because you have agreed to take a reduced salary. You benefit from not paying tax or NI on the salary you have agreed to give up.

Relief at source is where you make a contribution and the pension company adds 25% (which is the 20% basic rate relief due on the gross contribution you have made).

loukitten

@Dazed_and_C0nfused you might be right but they ask for "the net amount of pension contributions for each tax year you’re claiming for", they don't specifically say "only the contributions you paid directly" or "only the ones you're claiming for".

Even so, if I'm sending more documents and more evidence, it should still include also the info they need :(