Tax relief on pension payments

Hi, I'm an additional rate tax payer and paid £3000 into my workplace pension scheme for 2022-23. I'm sufficiently into the additional rate payer band that I'm expecting 45% tax relief on the pension payments. I am expecting the total tax relief on this to be £3000/(1-45%) - £3000 = £2455.55. However my pension provider has already claimed basic rate tax relief for me, i.e. £3000/(1-20%) - £3000 = £750 has already been claimed. That means I'm expecting an additional £2455.55 - £750 = £1704.55. However, upon filling in "Payments to registered pension schemes (also known as PPR) where basic rate tax relief will be claimed by your pension provider (called 'relief at source'). Enter the payments and basic rate tax" with £3750 = £3000 / (1-20%), the calculated tax relief is only 25% * £3750 = £937.5, i.e. £767 short of the £1704.55 I was expecting. Does anyone know what's going on / if I've misunderstood something?

Hi,

Your pension payment into the scheme is £30000. Your pension provider claims 20% relief of £600 for this payment.  

For you to claim higher/additional rate tax relief, you would claim £3000 on your tax return in the box for payments into a registered pension scheme, box 1 on page TR4 of SA100. This increases the basic rate band by £3000 so that tax is deducted at 20% on this payment and not at 45%. This gives you the additional tax relief due on your pension payment.

Thank you.

Hello I paid regular payments into a company pension scheme via salary in 2022/23. I also paid a ‘one off payment direct to my pension provider (no involvement from work/payroll). Total pension contributions for the year were £61k of which £48k from me, standard tax relief £12k and employee contributions £2.5k approx. One off payment was £46.5k, standard tax relief £11.5k approx (included in annual totals above). I was a higher rate tax payer. Query: under ‘Tax Reliefs’ what sum do I put in Question 1? And what sun do I put in 1.1? I have tried web live chat and phoning but no one has been sure what to advise. Thx

@james stein Hi, I'm not hmrc admin but you've calculated it incorrectly. It's a common mistake on relief at source contributions. The amount actually added to your pension is £3750. 55% of this (what you'd receive as take home if you took the £3750 as salary) is £2062.50. You initially pay £3000, are refunded £937.50 which is then deducted from the £3000 to give a net cost of £2062.50 for a contribution of £3750. Hope that helps.

Hi there, Confused about what I need to put in this box 'Payments to registered pension schemes (also known as PPR) where basic rate tax relief will be claimed by your pension provider (called 'relief at source'). Enter the payments and basic rate tax'. I don't pay into a person pension scheme other than a salary sacrifice I have set up where my employer puts a fixed amount each month into my private pension. I can't see any info from my private pension provider about whether tax relief has been claimed. For arguments sake say the fixed amount is £450 as shown on my pay slip that is transferred to my private pension.

@james stein I agree with @Bella Boo - and here is a different way of explaining it which might help: Your original calculation is actually correct, as far as it goes... but you have stopped short of considering that the tax relief ONLY applies to the money that ends up inside your pension. Therefore, the additional tax relief that is delivered by returning money to your income ... is once again subject to income tax! If you take your figure of £1704.55, and deduct income tax at your marginal rate of 45%, you get the actually received figure of £937.50.

@HFisher Please start a new thread, it would get confusing if we interleaved multiple different questions in one. When you do: 1) I think you said "employee contributions" when you meant "employer contributions". 2) There are no question numbers in the online tax return - your query would be easier to understand if you gave the question text.

@zaza_uk Please start a new thread for your own question. It would get confusing if we interleaved three different conversations in this one. However, if you know that all of your contributions are via salary sacrifice, you leave that box entirely empty. With salary sacrifice, you were never taxed on the contribution in the first place, so there is no need or entitlement to claim relief.

Hi HFisher,
Box 1, is the gross pension payment that you made, which included the tax claimed back by the pension provider (do not include anything paid by your employer).
Box 1.1, is the amount of one off payment made.
This will allow you to claim higher rate tax relief on your pension payments.
Please have a look at the pension scheme rates here:
Pension schemes rates,
You can check you annual allowance threshold here. 
Please have a look at the guidance for calculating your annual allowance and carrying unused allowance forward.
Any payments that exceed your pension allowance should be declared in a Self Assessment tax return in the additional information section (SA101).
Thank you. 

Hi zaza_uk,

Salary sacrifice does not get claimed on the return as this is payments made by your employer and not you.

Thank you.

Hi @HMRC I’m completing my self assessment and confused about what figure to enter in Q1 of the Tax Reliefs section. I pay into a relief at source pension scheme through PAYE. My understanding is that my payments are deducted from my net pay (i.e. before tax has been calculated on my full gross pay). My pension details the amount I paid in for the year(A), what my employer paid in (B) and the tax relief (C). Am I correct to enter A + C as the total or would it just be A? Thanks

Hi
As it is under net pay, you do not include these payments on the return as the correct tax relief has already been applied.

Hi, I’m in a higher rate (40%) tax band, does this change your guidance at all?

Sorry I’ve worded this wrong originally. Payments are deducted AFTER tax has been calculated on my full gross pay, as it is relief at source

Hi Viddywellbrother,
If payments are deducted after tax has been deducted you will only have received basic rate relief so you will claim the further relief in your tax return.
Thank you. 

 

Hi - a question please if you are deemed payment but the money has been paid into a limited company after tax. You have been deemed payment for the whole 12 months. You therefore intend to make your pension contributions from your deemed payment not your company as you have had very limited invoices in the tax year is this ok. An added complication the money was paid directly from the company bank account to the pension but this was purely because this is where the deemed payment money had gone. Your help appreciated. To us it seems the most honest way to do this.

Hi,

Deemed payments are treated as earnings from an employment with an intermediary, and are subject to PAYE.  

You can get tax relief on private pension contributions worth up to 100 percent of your annual earnings. You can see guidance here:         

Tax on your private pension contributions

Thank you.

As a high earner (40% tax)do I put the amount I have saved into my employer workplace pension scheme along with what the government has added through tax relief, which appears to be 25% of what I have put. Where do I put this? Is the overall heading ' Paying into registered pension schemes and overseas pension schemes?' Thank you

Hi Katherine Lesslar,
You would need to confirm whether your employer is giving tax relief at source on your pension payments, by deducted the payments from your income, before calculating the tax payable on the reduced amount.
If this is the case, then as tax relief of 40% is given at source, there is nothing more you can claim.
If your employer charged tax on your income before paying into your pension scheme, you can claim a further 20% relief by ticking 'yes' to 'Did you make contributions towards a personal pension or retirement annuity? ' on pge 3 o3 when tailoring your return.
When filling in your return, you would enter the amount you paid plus the 20% your pension provider claimed from HMRC in box ""Payments to registered pension schemes (also known as PPR) where basic rate tax relief will be claimed by your pension provider (called 'relief at source')"", when you click on ""Personal pensions and retirement annuities"""
Thank you.