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

Marcon

OP - until you clarify (both in your own mind and here) 'salary sacrifice' you're going to continue to go round in circles.

Salary sacrifice has a specific meaning: you reduce your contractual salary by £x in exchange for your employer paying £x into your pension (in addition to any 'normal' employer contributions).

Key question: what do your payslips show, both in your current and previous jobs? Are any contributions actually deducted from your monthly salary, reducing your take home pay for that month by the amount of the 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.

Your posts seem to imply that all contributions (except for the ones you made by bank transfer as 'extra' contributions) were by salary sacrifice. If that's the case, then there is no tax relief available on the contributions made by salary sacrifice - you've never paid any tax on them in the first place. I'm beginning to think that's what is creating the hopeless confusion between you and HMRC: salary sacrifice contributions aren't taken from your pay at all; they are paid by the employer on your behalf.

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?

A relief at source (RAS) scheme is (as mentioned above by Dazed) one where your personal contributions have basic rate relief added to them by the provider. Schemes don't 'become' RAS - that's how they are set up. All personal pensions are RAS.

There is no link between a scheme being a workplace pension scheme, a salary sacrifice scheme and/or a relief at source scheme. Those three things are, like the late lamented Woolworths, pick'n'mix - a scheme could be any or all of them.

molerat

Unfortunately many employers still show salary sacrifice contributions as a pension deduction rather than a reduced salary and increased employer contributions so muddying the waters.

DRS1

OP

I think it is clear from what you posted earlier that these single premium contributions that you personally made are relief at source contributions as you say

"In the pension provider document where I added my contributions, there is a section called "single premiums" with these columns:

Date, EE net, Tax relief, EE gross, ER gross, Total gross.

The EE net has the amount I paid, the Tax relief is the 25% of that amount, the EE gross is the previous amounts summed. ER gross is 0, Total gross is same as EE gross."

They are the ones for which you should be claiming the higher rate relief.

If the regular contributions (which presumably the pension provider shows in another bit) are all paid by salary sacrifice then they should all show up as "ER gross" and you should not be mentioning them at all in your claim.

There may however be a separate issue about your big contribution where you said you used carry forward. However people might need to see some figures to know about that. If HMRC thought this was the issue would they be asking you for evidence about only your contributions? I think they would be asking to see your carry forward calculations as well but I don't know that. I thought they took your word for it (that you had got the sums right).

loukitten

@Macron
My payslips for both employers show a reduction equal to the amount of pension paid for that month.

I perfectly understand that these regular pension contribution via salary sacrifice are not used to get any tax relief, which is only relative to the one-off contribution I made, which are of relief at source type.

I still fail to understand how the HMRC people are not understanding this. They ask for "the net amount of pension contributions for each tax year you’re claiming for" so I have provided ALL the contributions of all types, but I also specifically said that I was claiming only for the relief at source ones.

The problem is that to me this is all "speculations", it seems no one knows how to really do this claim, the explanation from HMRC is not clear, their explanation when they reject my claim is not clear, I don't know if anyone here has ever successfully applied for this or has a document that explains how to do it properly.

@DRS1 : There was nothing in the claim process requiring me to provide calculations on carry forward or anything relative to the fact that I was doing that within the tax-free allowance. I assumed those calculations had been already done by them when I first made the payment.
I'm not sure if I specified that the first payment was using carry-forward in the claim because they did not ask anything about it, but at the same time I am hoping they perfectly know better than me how that works and can easily calculate themselves if my payment was within the limits or not….
(although all my assumptions on the professionalism of these people are slowly failing)

DRS1

https://forums.moneysavingexpert.com/discussion/comment/81885796#Comment_81885796

First minor thing is that @Marcon is not the President of France.😀 At least I don't think so.

Second point is that lots of people have claimed the higher rate tax relief using the form you used and it seems to have worked. Problems can arise where the contribution does not get tax relief at basic rate in the pension and the individual is trying to claim both basic rate and higher rate relief through the form or by phoning HMRC. But that is not your problem.

I think you are going to have to call HMRC and hope you get someone who knows what their issue is. To me it seems you have provided adequate evidence of the net and gross contributions so I don't understand what more they are looking for. Maybe there is something in their letters to you which would give a clue to a trained eye like @Marcon. Maybe you could post a scan of the letters with any personal information blanked out?

My only thought was that your first claim could have been for an amount so high they could not believe it. For example if your taxable earnings for the year were £55k and you were claiming for a gross contribution of £70k.

Marcon

My payslips for both employers show a reduction equal to the amount of pension paid for that month.

My question was very specific: Are any contributions actually deducted from your monthly salary reducing your take home pay for that month by the amount of the contribution?

I perfectly understand that these regular pension contribution via salary sacrifice are not used to get any tax relief, which is only relative to the one-off contribution I made, which are of relief at source type.

I still fail to understand how the HMRC people are not understanding this. They ask for "the net amount of pension contributions for each tax year you’re claiming for" so I have provided ALL the contributions of all types, but I also specifically said that I was claiming only for the relief at source ones.

I've re-read this thread and I don't think you have provided documentary evidence of what HMRC has asked for (noted in your first post: 'I've received a letter saying I didn't provide enough evidence of having my contributions before or after tax'). Have you sent them confirmation that you personally paid your 'extra amounts' by bank transfer from your own bank account?

If you send them the relevant extracts from your bank statements (you can redact other parts of the statement provided your name, date and the payment to your pension provider are clearly visible), I think that might nail it. If you have sent this already, refer them to where you've supplied it and ask them to confirm why that does not meet their requirements and exactly what you are still expected to provide.

DRS1

OP You say this in an earlier post "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."

I think they are asking you about your personal contributions which have not come from your salary at all. So @Marcon's suggestion about supplying a redacted copy of your bank statements showing the payments may be the answer they need.

Don't talk to them about salary sacrifice - that will just confuse things.

sheramber

Forget about the salary sacrifice payments made by your employer.

You are not claiming relief for them.

HMRC asked for details for the payments YOU were claiming for. By including the salary sacrifice payments you have clouded the issue.

SimonSeys

Hi @loukitten

I got myself into a bit of a muddle - which you can read about here:

https://forums.moneysavingexpert.com/discussion/6632258/moving-from-alpha-to-partnership-tax-code-change-question

but it got sorted quite quickly thanks to advice of some wise heads on here

I ended up making two applications One for previous years, the other for the current year. For evidence, I included a statement from Vanguard which I could request online and it was available instantly. Your provider might have something similar. I also included a pdf explaining all of my pension arrangements (I’m also in a DB scheme). The vanguard statement shows gross contributions (ie the money I paid + 20%)

HMRC emailed / messaged me about a month later asking for more evidence. I phoned them and asked what they wanted. Apparently for some reason some of the documents didn’t upload correctly and so I resubmitted. All worked out (although my taxable pay was incorrectly reduced for a while but that was fixed)

Note that you only get the higher rate relief on anything above the higher rate tax threshold (ie salary must be more than higher rate plus Sipp pension contributions)

I asked (pleaded) for them to send me a self assessment form but they refused saying the above way was easier. They were right

TLDR: give them a ring and ask them what they need to see.

loukitten

Thanks everyone for your comments and especially "the president of France" who's been very patient and helpful :)

@DRS1: both identical letter say

"to help me look at your claim you need to find out what type of pension contributions are taken from your pay before tax is worked out. Please ask your pension administrator to confirm if your pension contributions are taken from your pay before tax is worked out.
If your pension contributions are taken or paid after tax, and/or you have paid a lump sum into a pension. Please send me evidence from your pension provider showing payments made for each tax year you're claiming for. The evidence should show the net amount of contributions you actually paid, the gross amount after the company has added the tax relief for you".

This makes me think they do want ALSO the list of contributions taken via normal salary sacrifice, but I might be wrong.
Do you all think I should resubmit the form with mentions of my lump sum contributions only?

@Marcon: I thought i had replied to that question… sorry my ignorance on the matter gets worse considering English is not my second language. My payslip have a gross salary amount and a pension amount that is deducted from it, so I believe the answer to your question is YES.

I haven't sent a confirmation that I personally transferred those lump sum, so that's a good shout, I will definitely send a bank statement next time. Thanks.
If this is the problem… it's definitely not clear from their instructions nor from their letters, though.

@SimonSeys: thanks a lot for sharing your experience! Unfortunately I did call them (and even submitted some complaints), but I had no chance to get more information about my claim, the person answering me would only say exactly the same thing as the letter and stating they know nothing more :(
I can try to call again… honestly at this point if they told me that my files didn't upload correctly, it'd be the only explanation possible…

I have also submitted a form at MoneyHelper but heard nothing back yet.

I might try to call again and then retry to submit the form with the bank statements.
Shall I include all my pension contributions including salary sacrifice ones… or not? anything else you would include after reading the letter? I'm still unsure about how to give evidence of type of pension contributions taken from my pay.