Been an idiot and need help claiming HR Tax Allowance!

Rodders2409 · 9 July 2018 at 5:01PM

Hello All,

Thinking I was getting somewhere in understanding Pensions etc, and I've realised I've missed another trick through being rather stupid.

I'm a HRT payer and have been for the past 15 years.

Our company transferred all our pensions to SalSac in June 2016, and I continued my payments at the same level of £1200 per month with the company paying £250 per month.

After spending many an hour on the Forum, supported by the helpful members of MSE, I decided to maximise my SalSac contributions, bringing my PAYE salary below the HRT threshold to maximise tax efficiency. This started 6 months ago.

Then it dawned on me that I'd made a stupid error, because I have never claimed the additional relief as a HRT payer for the past 15 years or so.:eek::eek::eek:

Just called the Tax Office to find out where I stand and they advise that I can only go back as far as 2014/15, in terms of backdated claims....so 2.5 years.

Is this correct?
Is it best to claim that through Self Assessment, as I complete one for a rental property?
Does the fact that I make significant contributions through Sal Sac have any impact?

Many thanks for helping stem the tide of stupidity....:)

MallyGirl · 9 July 2018 at 5:10PM

Anything done through Sal Sac is gross so no tax to reclaim as you didn't pay tax on the bit you sacrificed to the pension. You might be able to claim a few months before that if the 2.5 yr limit is hard and fast

Rodders2409 · 9 July 2018 at 5:21PM

Thanks Mally

Is it best and easy to use the Self Assessment route to claim it back?

MallyGirl · 9 July 2018 at 6:15PM

I'd call the tax office as you are wanting to claim from previous years and you have presumably already submitted those returns (if you do them).

sal sac down below HRT is a good choice - saves NI as well, and if relevant can get child benefit back or qualify for £1000 savings interest free of tax

System · 9 July 2018 at 6:27PM

Are you sure there is any tax relief to reclaim? How were the pension contributions taken before salary sacrifice was introduced?

msallen · 9 July 2018 at 6:32PM

If your pension payments were from gross rather than net pay before the change to sal sac then there's nothing to reclaim anyway as it would be squared up via PAYE.

Are you sure you actually have a claim?

ETA: Damn - beaten to it by Economic

Triumph13 · 9 July 2018 at 6:57PM

Hi Rodders,
As others have said, it all comes down to how your pension was arranged in those years before sal sac. The more usual way is for your employer to take the contributions from your pre-tax salary eg income £100, pay £20 to the pension, taxable salary is now only £80. You automatically get full tax 'relief' as the contributions never get taxed.
The other (and much less common) way is via something like a group personal pension where the employer takes the payment from your post tax salary. Income £100, taxman takes £40, £16 of what's left goes to the pension provider - who reclaims a further £4 from HMRC. You then reclaim another £4.

Are you sure that you were in the latter type of arrangement not the former?

Dox · 9 July 2018 at 7:26PM

Triumph13 wrote: »

Hi Rodders,
As others have said, it all comes down to how your pension was arranged in those years before sal sac. The more usual way is for your employer to take the contributions from your pre-tax salary eg income £100, pay £20 to the pension, taxable salary is now only £80. You automatically get full tax 'relief' as the contributions never get taxed.
The other (and much less common) way is via something like a group personal pension where the employer takes the payment from your post tax salary. Income £100, taxman takes £40, £16 of what's left goes to the pension provider - who reclaims a further £4 from HMRC. You then reclaim another £4.

That used to be the case, but the post-tax salary route is now much more common, given how few occupational schemes (final salary or money purchase) are left.

Brynsam · 9 July 2018 at 7:28PM

Triumph13 wrote: »

Hi Rodders,
As others have said, it all comes down to how your pension was arranged in those years before sal sac. The more usual way is for your employer to take the contributions from your pre-tax salary eg income £100, pay £20 to the pension, taxable salary is now only £80. You automatically get full tax 'relief' as the contributions never get taxed.
The other (and much less common) way is via something like a group personal pension where the employer takes the payment from your post tax salary. Income £100, taxman takes £40, £16 of what's left goes to the pension provider - who reclaims a further £4 from HMRC. You then reclaim another £4.

Are you sure that you were in the latter type of arrangement not the former?

The majority of schemes are now GPPs, so highly likely that contributions were taken from post-tax salary.

atush · 10 July 2018 at 8:58AM

Gutted for you

zagfles · 10 July 2018 at 9:12AM

Brynsam wrote: »

The majority of schemes are now GPPs, so highly likely that contributions were taken from post-tax salary.

Maybe, but OP needs to check, rather than assuming. OP, if you're not sure, easiest way is check your pension statements and see if tax relief was claimed for your contributions, if they were then it's a RAS scheme and you can claim additional higher rate tax relief.

Or look at your payslips and see how the "taxable to date" increased from one month to the next. Did it go up by gross earnings, or gross earnings minus pension conts? If it went up by gross earnings then it's a RAS scheme. If it went up by gross earnings minus pension then it's not, and it was what HMRC confusingly called "net pay" which means you get full tax relief in your payslip.

Been an idiot and need help claiming HR Tax Allowance!

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