Tax relief for self-employed non-tax payer

Bunbury

Hi, I’d be grateful for advice regarding the level of tax relief on private pensions for a self-employed person who doesn’t earn enough to pay income tax.

My only personal income is from a small online business I run alone, and which will make approximately £7,000 after expenses in 2025-26 (I live with a partner who is the main earner).

From these earnings I’ve been paying monthly into a private pension. Contributions this year total £3,000 and automatically receive the tax ‘top-up’.

I want to make an additional contribution before the end of 2025/26 so my question is: is it correct that as I don’t pay tax, I can get relief on contributions up to 80% of my earnings?

So, if 80% of my net earnings is £5,600 and I’ve already contributed £3,000 can I contribute another £2,600 and get the ‘top-up’?

Many thanks.

NoMore

The amount of tax relief you get from pension contributions, is not directly related to the amount of tax you pay, it's based on your relevant uk earnings, or up to £3600 (2880 net) if relevant earnings are less than £3600.

So in your case yes, you can contribute 80% of your earnings and get tax relief despite not paying any income tax.

Bunbury

https://forums.moneysavingexpert.com/discussion/comment/81920033#Comment_81920033

Thanks for responding. I thought that was the case but do like to double-check!

Marcon

Helpful reading: https://www.litrg.org.uk/pensions/paying-pensions/tax-relief-pension-contributions

Bunbury

https://forums.moneysavingexpert.com/discussion/comment/81920072#Comment_81920072

Thank you, that's very helpful.

LHW99

If you are self-employed you need to be aware that it's 80% of profit, not turnover that counts as earnings for pension contributions

Bunbury

https://forums.moneysavingexpert.com/discussion/comment/81921221#Comment_81921221

Thanks, yes the £7,000 I mentioned is after business expenses.