Anyone claimed higher tax relief on past years' pension contributions?

Hi all,

I have only recently become aware that my latest workplace pension only applies basic rate tax relief to my pension contributions. As a higher rate tax payer I know now that I can claim relief at the higher rate, and this would apply to my entire contributions, which is not an insignificant sum.

Luckily, having done a bit of research it seems that you are able to make a claim for up to 4 previous years, which covers the entire period I have been contributing to this particular pension.

I've found a pro-forma letter to use to request the relief on these past years, but wondered has anyone else had practical experience in claiming for this relief and if so any tips you might be willing to share?

Thanks in advance all!
Robert

I have done it on an annual basis via my self assessment form. All very straightforward if you have your P60 to hand.

Don’t know what the process is for multi year claims and rebates, but if it is anything like self assessment, I did not find it difficult.

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Originally Posted by noTAGlove

I have done it on an annual basis via my self assessment form. All very straightforward if you have your P60 to hand.

Don’t know what the process is for multi year claims and rebates, but if it is anything like self assessment, I did not find it difficult.

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Indeed straight forwards for year on year self-assessment, but them actually paying it back is getting slower and slower even though it autogenerated what you are owed, it still needs to be "authorised". Weird the hounding, late payment fees and silly interest only appears to apply when you owe them...:black_eyed: Also if PAYE they update your tax code to avoid having to submit if earn the same the following year.

Thanks for this, I do intend to use self assessment going forward.

If I understand right declaring the amounts in the tax return allows HMRC to adjust your tax code for the following year to effectively give you the refund for the current year by raising your tax threshold for the following year?

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Originally Posted by Chicken Pox

Indeed straight forwards for year on year self-assessment, but them actually paying it back is getting slower and slower even though it autogenerated what you are owed, it still needs to be "authorised". Weird the hounding, late payment fees and silly interest only appears to apply when you owe them...:black_eyed: Also if PAYE they update your tax code to avoid having to submit if earn the same the following year.

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Ah sorry replied to the previous msg, but this makes sense.

Is that a standard thing employers do for higher rate tax payers? (ie apply tax relief at the basic rate).

If so, I think I may have lost out on a decent wedge of pension cash! Too far to go back now though as it is over 4 years.

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Originally Posted by Maysie

Is that a standard thing employers do for higher rate tax payers? (ie apply tax relief at the basic rate).

If so, I think I may have lost out on a decent wedge of pension cash! Too far to go back now though as it is over 4 years.

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Yes its apparently normal practice, even if you have lost out you can claim for the last 4 years so at least you get some of it back, I found this quite helpful:
https://getpenfold.com/news/claim-hi...ion-tax-relief

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Originally Posted by Robertf

Hi all,

I have only recently become aware that my latest workplace pension only applies basic rate tax relief to my pension contributions. As a higher rate tax payer I know now that I can claim relief at the higher rate, and this would apply to my entire contributions, which is not an insignificant sum.

Luckily, having done a bit of research it seems that you are able to make a claim for up to 4 previous years, which covers the entire period I have been contributing to this particular pension.

I've found a pro-forma letter to use to request the relief on these past years, but wondered has anyone else had practical experience in claiming for this relief and if so any tips you might be willing to share?

Thanks in advance all!
Robert

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Just to clarify, is your current workplace pension Salary Sacrifice? If yes, you dont need to (cannot claim) any relief.

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Originally Posted by Maysie

Is that a standard thing employers do for higher rate tax payers? (ie apply tax relief at the basic rate).

If so, I think I may have lost out on a decent wedge of pension cash! Too far to go back now though as it is over 4 years.

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Not to be a pedant but the employer doesn't apply the Relief at Source (RAS) its the pension provider.

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Originally Posted by Robertf

Ah sorry replied to the previous msg, but this makes sense.

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I recall you can update your salary when know it for the financial year e.g. after pay rise etc and can adjust the code but also assumes still contributing same percentage of salary to pension; I've been upping mine so file each year even if says "I don't need too" otherwise I'd lose the claim back on the difference.

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Originally Posted by Estoril-5

Not to be a pedant but the employer doesn't apply the Relief at Source (RAS) its the pension provider.

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Indeed part of the self assessment gives you formula to calc what the pension company claimed back eg. you put in 10k but for self assess put in 10k x formula (is there some NI relief so not just income tax? I shall remind myself as time to submit again soon!)

Thanks everyone, I have checked with my employer and they apply only basic relief, so I do need to claim. Luckily I only need to claim for the past 4 years plus the tax year just closed which I can handle via self assessment in due course.

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Originally Posted by Robertf

Hi all,

I have only recently become aware that my latest workplace pension only applies basic rate tax relief to my pension contributions. As a higher rate tax payer I know now that I can claim relief at the higher rate, and this would apply to my entire contributions, which is not an insignificant sum.

Luckily, having done a bit of research it seems that you are able to make a claim for up to 4 previous years, which covers the entire period I have been contributing to this particular pension.

I've found a pro-forma letter to use to request the relief on these past years, but wondered has anyone else had practical experience in claiming for this relief and if so any tips you might be willing to share?

Thanks in advance all!
Robert

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How can you tell? Is there something on your P60 or monthly salary form?

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Originally Posted by Wolfie

How can you tell? Is there something on your P60 or monthly salary form?

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Do you contribute to workplace pension direct from salary? If so as above your pension company claims the basic 20% rate of tax only, if you are higher tax bracket you need to claim the relief yourself via self assessment if not already doing so. It's a nice wheez that that they don't automatically tell you you've overpaid tax. I believe this does not apply if your pension contribution is via salary sacrifice (but I'm no expert)

You should get statement from your pension company e.g. your company contributed x, you contributed y and you received z in tax relief.

Had a quick check on my pension and under Tax Relief:
When you pay into your workplace pension from your salary after income tax has been taken, the Government gives you an extra bonus known as tax relief. This means that for every £80 you pay in, £20 is automatically added to your pot.

If you pay a higher rate of tax, you may be able to claim more tax relief through self-assessment. You won’t receive tax relief on any pension pots you transfer to us. Please also be aware that tax rules can change.

If you pay into your workplace pension through a salary sacrifice arrangement offered by your employer, payments are taken from your salary before tax and don’t receive tax relief.

If you’re not sure if your workplace pension has a salary sacrifice arrangement in place, please speak to your employer.

Think my circumstances are slightly different to the OP in that I'm a self employed and a sole trader so not sure how much use my post will be but I made a not insignificant pension payment during 23/24 simply to benefit from the tax relief (ie it is the most sensible use of funds). My accountant is sorting everything out via self assessment. We recalculated tax owed for Jan 25 and July 25 and the reduction was considerable. We will also be making a case to reduce these payments based on pension contributions I intend to make in the 24/25 tax year.

unusual these days for it not to be salary sacrifice and deducted/offset against wages by employer via them paying the extra on your behalf; giving you NI savings too.

I did this on last years tax return claiming all 4 previous years. It’s pretty easy on the self assessment form.

When I submitted it told me straight away I’d overpaid a fairly significant amount and they owed me.

It took about 3 1/2 months to end up in my bank though. Funny how they don’t pay interest when they owe you and they take their time.

I’m filling in my self assessment in the next few weeks as I made quite a lot of one off payments into my SIPP last year to get the tax benefits so I would like the money back.

I’ve just done this on mine for the following

Tax years 21/22 & 22/23. Needed the gross amount paid to my pension for each year. Once I had that I phoned them. All sorted out within an hour. I then claimed the money back through the online portal and the money was in my bank account within three days. All done within five days.

For tax year 23/24 I couldn’t get my tax code changed quick enough as I was going through the above mid March. So I’m currently waiting for my P111D (I think) to be completed by my wages department. Should be submitted to HMRC by the end of this month. I already have my P60. Once I have both HMRC will adjust what I paid and then send me what they owe me.

For tax year 24/25. I filled out a form online and they’ve adjusted my tax code to compensate for my allowance. That will need to be done each year if there is an increase in the gross amount I payment.

Our FC at work told me you can do it through self assessment but it may take longer and you could incur a fine for submitting late for the previous tax year. That’s why I rang them. You just need to prepare for being hold for 45 minutes.


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Originally Posted by Chicken Pox

Indeed straight forwards for year on year self-assessment, but them actually paying it back is getting slower and slower even though it autogenerated what you are owed, it still needs to be "authorised". Weird the hounding, late payment fees and silly interest only appears to apply when you owe them...:black_eyed: Also if PAYE they update your tax code to avoid having to submit if earn the same the following year.

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HMRC owed me a few K after last year's self assessment. They paid up in 3 weeks. All very straightforward and efficient for me.

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Originally Posted by westberks

unusual these days for it not to be salary sacrifice and deducted/offset against wages by employer via them paying the extra on your behalf; giving you NI savings too.

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Cheers, thought that was the case also; will check in the morning to be safe, but am pretty convinced that is the way mine does it.

Did have me pondering on the train home; god I hate my 4th trip to the office in the smoke this year!


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Fantastic thanks everyone. I will be on the phone to HMRC in the morning. I was going to write but sounds like a faster response via phone call.

Thanks again!

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Quote:

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Originally Posted by Chicken Pox

Do you contribute to workplace pension direct from salary? If so as above your pension company claims the basic 20% rate of tax only, if you are higher tax bracket you need to claim the relief yourself via self assessment if not already doing so. It's a nice wheez that that they don't automatically tell you you've overpaid tax. I believe this does not apply if your pension contribution is via salary sacrifice (but I'm no expert)

You should get statement from your pension company e.g. your company contributed x, you contributed y and you received z in tax relief.

Had a quick check on my pension and under Tax Relief:
When you pay into your workplace pension from your salary after income tax has been taken, the Government gives you an extra bonus known as tax relief. This means that for every £80 you pay in, £20 is automatically added to your pot.

If you pay a higher rate of tax, you may be able to claim more tax relief through self-assessment. You won’t receive tax relief on any pension pots you transfer to us. Please also be aware that tax rules can change.

If you pay into your workplace pension through a salary sacrifice arrangement offered by your employer, payments are taken from your salary before tax and don’t receive tax relief.

If you’re not sure if your workplace pension has a salary sacrifice arrangement in place, please speak to your employer.

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I’ve asked HR…. Thanks for the guidance…

If your company offers a salary sacrifice scheme it's also worth noting that this will reduce your NI contributions too.

Just to close the loop on this one, I called HMRC today, and the adviser amended my tax code so this current year I get relief immediately, then confirmed for last financial year I could amend my self assessment details online, which I did and confirmed a refund is due, which I should be able to get in 72hrs. for the earlier years, I was able to claim back to 2019-20 but these had to be done via letter apparently, which I will sort and send later this week. These older claims I was told might take as long as 20 weeks to deal with, which I am OK with.

I fee a bit silly for not having known about this requirement to reclaim myself, if anyone is in any doubt contact your pension provider and employer to make sure you're getting the correct level of relief.

Glad you’re sorted.

The advisor is blagging it about only being able to do it in writing for previous years. Holding onto your money for 20 weeks.

At least you’re sorted.


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