If you are a higher rate tax payer and contribute to a private pension, it’s likely you could be entitled to claim UK pension tax relief. Many don’t know they can claim and assume that they will receive any tax relief they are owed automatically.
The tax office allows any pension tax relief due to be backdated for the last four tax years, meaning you could be due a substantial tax rebate.
Why would I be due UK pension tax relief?
Most people who contribute into a private pension will automatically have tax relief applied at the basic rate of 20%. This includes those people who pay at a higher tax. If you pay tax at the higher rate (which is currently 40% or more) you will miss out on half of your available tax relief – unless you claim it back.
UK pension tax relief is not normally due for people who contribute to an occupational or public service pension.
Who can claim UK pension tax relief?
You will be eligible to claim UK pension tax relief if you:
- Are a higher rate tax payer ( paying tax at 40% or higher )
- Employed under PAYE
- Have completed your self assessment tax return incorrectly
- Have not had your tax code changed to reflect your private pension contribution payments
- Have not completed a Self Assessment tax return
Have I already received my UK Pension Tax Relief?
Normally you will only receive your full pension tax relief automatically if you have completed a Self Assessment tax return. If you do not fall into this category, and you do not have an accountant or IFA, there is strong possibility you are not receiving the maximum tax relief available to you.
What about Retirement Annuities?
In addition to tax relief being available for higher rate tax payers who pay into a private pension, it is also available on retirement annuities.
Claiming Tax Relief on Pension Contributions
You can use our higher rate pension tax relief guide to learn more about your eligibility and how to make a claim with HMRC.
