Accountancy Matters with AMMU
Let’s explore unclaimed pension tax relief.
Over £1.3 billion in unclaimed pension tax relief has been left by high earners in the UK! Are you maximising your tax relief?
It’s crucial to understand and claim what you’re entitled to. Here’s what you need to know about pension tax relief and how to make the most of it.
What is Pension Tax Relief?
Pension tax relief incentivises retirement savings through tax-efficient contributions, making it one of the most tax-efficient savings methods available.
How Much Tax Relief Can You Get?
Tax relief is available on your payments up to your Pension Annual Allowance, which for the 2023/24 tax year is £60,000 or your total salary (whichever is lower). Exceeding this amount could lead to a tax charge.
Why Is Tax Relief Left Unclaimed?
Pension tax relief isn’t automatically applied for higher-rate and additional rate taxpayers; it varies by pension plan. As many are unaware of the process, seek expert advice.
How to Claim Your Tax Relief
For higher or additional rate taxpayers, follow these steps to claim your extra tax relief:
1. Check if you’re in a net pay arrangement (no action required) or a relief at source arrangement (action required).
2. To claim additional tax relief, submit a self-assessment tax return by the deadline of 31 January (online) or 31 October (paper).
3. You’ll receive the tax relief as a rebate or an adjustment to your tax code – the amount may change based on changes to your pension contributions or salary.
Can You Claim Tax Relief for Previous Years?
Yes, you can claim tax relief for the previous four tax years only.
Consult an expert to understand pension tax relief eligibility and claim it for boosted retirement savings, avoiding missed opportunities to grow your pension.
Ammu Chartered Accountants
10 Newton Terrace
G3 7PJ
0141 290 0262
or
8 Miller Road
Ayr
KA7 2 AY
ammu.uk
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