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  • FIRST POST
    • Millymoo9
    • By Millymoo9 9th May 18, 7:55 AM
    • 11Posts
    • 1Thanks
    Millymoo9
    Not Eligible for Tax Relief
    • #1
    • 9th May 18, 7:55 AM
    Not Eligible for Tax Relief 9th May 18 at 7:55 AM
    Hello everyone. I would just like some advice please on this Personal Pension situation. Last year I was still on the books with a care company but had turned down work and was then not offered any ( I didnít really want to do the job anymore as I now help and support my father in careing for my Mum who has dementia and it can be depressing ). I tried for part time shop work but wasnít having much luck (at 62 years old) so thought as I had being having carers allowance for a few months that for the first time ever I would apply for income support. I started a pension with the care company only a couple of years before ( Nest) and had been paying in as much as I was allowed to each year since. I had read that I could still pay in £2800 even if not working so decided it might be best to do so. On the Nest website it says that you have to state if you are eligible for tax relief, I thought as I wasnít working that I wasnít eligible. Only after reading and talking to others I realised that I was! It was too late then, so Nest advised me to write to HMRC and asked what they could do. They said that they would give me extra tax relief ( I told them that I might take my pension last year in chunks, but didnít). About a month after I did get a part time job ( didnít claim income support after) and my hours were 16 so I then payed monthly into my pension so I didnít loose my carers allowance. I didnít think about how much I would earn last year. I also had tax credits but only for the last few months . So It ended up when the job finished ( seasonal) that I had payed too much in ( a bit more than my earnings plus some tax relief on monthly payments) . I started the job again at Easter ( had a bit of income support over December to then) and stated payin monthly into the scheme again to keep carers allowance and noticed no tax relief. So HMRC when I spoke to them say that because of my projected low earnings this year that I am not eligible for tax relief. I think that I need to pay them back the ( approx)£200 tax relief for last year. It says on the website that you can still have tax relief up to £2880 on earnings if you donít earn much. I am confused! What do you think ? Sorry for the long post! Thanks in advance
Page 1
    • Brynsam
    • By Brynsam 9th May 18, 8:37 AM
    • 1,684 Posts
    • 1,234 Thanks
    Brynsam
    • #2
    • 9th May 18, 8:37 AM
    • #2
    • 9th May 18, 8:37 AM
    As a modest earner, you are eligible for tax relief at the basic rate on contributions of the higher of your earnings OR £3,600 (i.e. £2,800 net + tax relief at 20%), so doesn't sound as if you need to repay anything.

    Useful reading: https://www.which.co.uk/money/pensions-and-retirement/personal-pensions/contributing-to-a-private-pension-explained/tax-relief-on-pension-contributions-explained-a27f53z7qg3f
    • Millymoo9
    • By Millymoo9 9th May 18, 9:18 AM
    • 11 Posts
    • 1 Thanks
    Millymoo9
    • #3
    • 9th May 18, 9:18 AM
    • #3
    • 9th May 18, 9:18 AM
    The problem is that my employer has enrolled me this year with Nest, but as my earnings are low he doesnít have to pay in , but I can . So Nest has asked me to clarify if I am eligible for tax relief. As I say , I phoned HMRC yesterday and spoke to a nice lady and explained everything to her, she then went away for quite sometime and then came back and said that I wasnít eligible. I think that she may have put all the details into the computer and that was the result. She said that I could claim back if I was a higher tax payer...which, of course, Iím not. That was the general tax enquiry line. There is one especially for pensions. I wonder if I should phone them?
    • xylophone
    • By xylophone 9th May 18, 11:54 AM
    • 27,345 Posts
    • 16,360 Thanks
    xylophone
    • #4
    • 9th May 18, 11:54 AM
    • #4
    • 9th May 18, 11:54 AM
    See
    https://www.nestpensions.org.uk/schemeweb/NestWeb/public/helpcentre/contents/how-will-i-know-which-workers-are-eligible-for-tax-relief.html

    NEST operate "relief at source" so you should be receiving tax relief of the appropriate amount?

    http://www.thisismoney.co.uk/money/pensions/article-5706383/Millions-women-cruelly-robbed-pension-tax-breaks.html
    • michaels
    • By michaels 9th May 18, 12:17 PM
    • 21,586 Posts
    • 100,255 Thanks
    michaels
    • #5
    • 9th May 18, 12:17 PM
    • #5
    • 9th May 18, 12:17 PM
    OP did you pay in 2880 plus then some percentage of earnings so your total pay in including relief exceeded both 3600 and your earnings?

    In this case you will have to pay a tax charge equal to the tax relief on any payment above the 2880 net 3600 gross unfortunately generally this tax relief can not be repaid by the pension company.
    Cool heads and compromise
    • xylophone
    • By xylophone 9th May 18, 12:45 PM
    • 27,345 Posts
    • 16,360 Thanks
    xylophone
    • #6
    • 9th May 18, 12:45 PM
    • #6
    • 9th May 18, 12:45 PM
    OP, how much is your gross annual salary?

    How much do you wish to contribute to the pension?
    • Millymoo9
    • By Millymoo9 9th May 18, 1:18 PM
    • 11 Posts
    • 1 Thanks
    Millymoo9
    • #7
    • 9th May 18, 1:18 PM
    • #7
    • 9th May 18, 1:18 PM
    Hello, sorry for late reply. Last year My lump sum plus monthly contributions came to a total of £3440 with tax relief of £160. The exact total came to £3600.25 ( figures from Nest). My total earnings were £2928. On the Nest contribuitions page this tax year it says on my contributions !!!8216; not eligible !!!8216; on the tax relief contributions. If I get tax relief this year I would like to pay in as much as I can because of my age. My earnings should be about £4000 this year. Thanks
    • xylophone
    • By xylophone 9th May 18, 2:52 PM
    • 27,345 Posts
    • 16,360 Thanks
    xylophone
    • #8
    • 9th May 18, 2:52 PM
    • #8
    • 9th May 18, 2:52 PM
    Even without "relevant earnings" a person can make a net contribution of up to £2880 in a tax year and receive tax relief, bringing the total pot to £3,600.

    I would like to pay in as much as I can because of my age. My earnings should be about £4000 this year.My earnings should be about £4000 this year. Thanks
    With gross relevant earnings of £4000, you could pay in up to £3,200 in a tax year and receive tax relief of up to £800.

    NEST operate RAS - have you explained that while you earn too little to be auto enrolled/for your employer to be obliged to contribute, you will earn £4000 in the current tax year and so would wish to contribute £3200 to the pension and receive tax relief of £800?

    https://www.nestpensions.org.uk/schemeweb/NestWeb/public/helpcentre/contents/how-will-i-know-which-workers-are-eligible-for-tax-relief.html


    Workers are eligible for tax relief if they're under the age of 75 and:

    they have UK earnings that are subject to income tax for the tax year
    they're resident in the UK at some time during the tax year

    they were resident in the UK at some time during the preceding five tax years when they joined the pension scheme.
    Contributions paid after a worker's 75th birthday aren't eligible for tax relief.

    The maximum amount of contributions on which a worker can claim relief is whichever of the following is greater:

    the basic amount - currently £3,600 including tax relief
    the amount of the individual's UK earnings for the tax year.
    This means that a worker who has no relevant UK earnings may still qualify for tax relief on contributions into a registered pension scheme up to the basic amount.

    The tax relief is available even if the worker is a non-taxpayer.
    • xylophone
    • By xylophone 9th May 18, 2:56 PM
    • 27,345 Posts
    • 16,360 Thanks
    xylophone
    • #9
    • 9th May 18, 2:56 PM
    • #9
    • 9th May 18, 2:56 PM
    If you are finding the NEST system too difficult to negotiate and as you are not receiving any employer contribution, would it be simpler to give up on NEST and just open a simple stakeholder?

    https://www.cavendishonline.co.uk/pensions/stakeholder-and-personal-pensions/aviva/
    • Millymoo9
    • By Millymoo9 9th May 18, 3:14 PM
    • 11 Posts
    • 1 Thanks
    Millymoo9
    Thank you all for your help. To be fair, it!!!8217;s not really Nest that is the problem. In my personal settings I have to state whether or not I!!!8217;m eligible for tax relief, and I have stated that I am. It!!!8217;s on my contributions page where Nest have to claim it from HMRC that it says that I!!!8217;m ineligible for tax relief on the contributions. It!!!8217;s quite complicated because the Carers Allowance unit told me on one occasion that my pension payments would be calculated over the whole years contributions but also told me that a lump sum payment doesn!!!8217;t count, only my monthly payments. Nest have told me that it!!!8217;s not their decision, it!!!8217;s up to HMRC.
    • Millymoo9
    • By Millymoo9 9th May 18, 3:18 PM
    • 11 Posts
    • 1 Thanks
    Millymoo9
    Sorry, but I don!!!8217;t know where some of these numerals are coming from on my responses?!!!!55357;!!!56833;
    • kidmugsy
    • By kidmugsy 9th May 18, 4:21 PM
    • 12,078 Posts
    • 8,527 Thanks
    kidmugsy
    Sorry, but I don!!!8217;t know where some of these numerals are coming from on my responses?!!!!55357;!!!56833;
    Originally posted by Millymoo9
    They're from a software flaw that afflicts users of ... I'm not sure - iPads perhaps. I use an iMac with the Safari browser; they don't affect me.
    Free the dunston one next time too.
    • Millymoo9
    • By Millymoo9 9th May 18, 4:26 PM
    • 11 Posts
    • 1 Thanks
    Millymoo9
    Yes! I!!!8217;m using my iPad. Thanks
    • Millymoo9
    • By Millymoo9 9th May 18, 4:40 PM
    • 11 Posts
    • 1 Thanks
    Millymoo9
    Thank you, Iím very grateful for everyoneís help.
    • Millymoo9
    • By Millymoo9 9th May 18, 9:06 PM
    • 11 Posts
    • 1 Thanks
    Millymoo9
    Hi Michael , how do I stand with the figures Iíve given? Please can you explain to me in simple terms?
    • michaels
    • By michaels 9th May 18, 10:05 PM
    • 21,586 Posts
    • 100,255 Thanks
    michaels
    Don't know about nest but last year if you earned less than 3600 last year you should not have contributed more than 3600 total to the pension of which in theory 2880 should have been your payment and the remainder the tax relief.

    This year if you earn 4k that should be you maximum contribution of which 3k comes from your post tax income and remainder tax relief.

    There is a way of getting rid if the funny numbers for quotes from an iPad, something in settings, not sure if it is iPad settings or on this site.....Try changing message editor interface on this page?

    https://forums.moneysavingexpert.com/profile.php?do=editoptions
    Cool heads and compromise
    • Millymoo9
    • By Millymoo9 9th May 18, 10:21 PM
    • 11 Posts
    • 1 Thanks
    Millymoo9
    Thank you Michaels. I think that I will explain everything to Nest and see what they can do. Thanks for the link! Let!!!8217;s see if this posting is a bit better!
    • xylophone
    • By xylophone 9th May 18, 11:13 PM
    • 27,345 Posts
    • 16,360 Thanks
    xylophone
    of which 3k comes from your post tax income
    With gross income of £4000 for the tax year 2018-19 she could contribute a maximum of £3,200 into a RAS scheme and receive tax relief of a maximum £800.
  • jamesd
    Thank you Michaels. I think that I will explain everything to Nest and see what they can do. Thanks for the link! Let's see if this posting is a bit better!
    Originally posted by Millymoo9
    Just tell NEST your actual pay for last year and they can refund to you the amount above that or £3,600 after tax relief, whichever is higher. It's routine and the payment to you is called a refund of excess contributions lump sum.
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