How do I claim Additional Rate Pension Tax Relief?
Additional rate taxpayers who are eligible to claim higher rate pension tax relief can use a self assessment tax return, HMRC’s online service or can make a written application.
HMRC leaves the responsibility with additional rate taxpayers to include applicable pension contributions on their self assessment tax return and if you don’t you won’t receive the pension tax relief due.
Some pension providers claim the first 20% of pension tax relief automatically for you through a process called relief at source. This leaves an extra 25% tax relief available to claim back because you pay tax at the additional rate of 45%.
How much Additional Rate Pension Tax Relief can I claim?
HMRC allows tax relief at a total rate of 45% for additional rate taxpayers. If your pension scheme operates relief at source which is deducted at a rate of 20% an extra 25% tax relief can be claimed back by additional rate taxpayers.
If you are a higher rate taxpayer (paying tax at a rate of 40%) the relief allowed can be claimed back at a rate of 20% instead of 25%.
When can I claim Additional Rate Pension Tax Relief?
The extra 25% tax relief on your pension payments are possible when:
- You pay tax at the additional rate of income tax and your pension provider automatically claims the first 20% via relief at source.
- Your pension scheme does not allow automatic tax relief.
- Another individual pays into your pension.
If your pension contributions are deducted by your employer before they work out your taxable pay you shouldn’t need to make a claim for pension tax relief.
This arrangement is called net pay and means you receive the pension tax relief you are entitled to at the highest rate you pay tax.
How do I claim Additional Rate Pension Tax Relief?
For additional rate taxpayers that have to complete a self assessment tax return you should include your relevant pension contributions in the “Tax Reliefs” section of your tax return.
When HMRC have processed your tax return the tax relief will be operated and any tax rebate due shown on your SA302 tax calculation.
If you don’t complete a tax return you can either:
Use HMRC’s online dedicated portal for higher rate pension relief claims through the .GOV website.
Alternatively, you may submit a written application with supporting documentation for each tax year to:
PAYE and Self Assessment,
HMRC,
BX9 1AS.
Take a look at our Pension Tax Relief Guide to learn more about pension tax relief for higher rate taxpayers.
Our comprehensive guide explains how to claim your tax relief, understand eligibility criteria, and the evidence you need to make a claim.
