Remember to claim higher rate tax relief on pension contributions – Money tip #188
According to the latest research only 22% of high rate tax payers claim all the tax relief they are entitled to. Apparently the total unclaimed is around £296million per year.
How does this happen?
Members of occupational money purchase schemes usually receive full tax relief on contributions via their payroll.
But when you contribute to a private pension (including group personal pensions provided through your employer), the only provider claims basic rate tax relief (20%) on your behalf. As such higher rate tax payers have to reclaim the additional tax relief.
How do I claim the additional tax relief?
By completing a self assessment tax return. The deadline for completing a self assessment tax return is 31st January following the end of the tax year in which the contribution was made.
So make sure that you are receiving the full amount of tax relief, on your pension contributions, which you are entitled to if you are a high rate tax payer (i.e earn over £42,476 for the 2012/13 tax year)
Can I claim tax relief for previous tax years where I forgot to do so?
If you have not claimed higher rate tax relief for a previous tax year it is possible to make a claim - subject to certain time limits. Full details are given in my article - Reader Q: Can I claim tax relief on pension contributions from previous tax years?
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