HMRC explains tax rules on pensions as some employers 'not claiming' relief
A customer got in touch with a query about how self assessment works
HMRC has issued a clarification on how to claim tax relief on pensions after a query from a worker.
The person contacted the tax authority over X to ask: "My pension provider does not claim basic rate tax relief for me on my single payments into my employer's pension scheme. How do I claim basic rate tax relief on the self assessment form?"
The tax body first asked the individual to confirm if they were a higher rate taxpayer. They replied to say that they were.
HMRC then stated: "In Section 3 of your tax return, Tailor your return, you will need to select yes to the question "Did you make contributions towards a personal pension or retirement annuity?"
The taxpayer responded: "I know this bit, but I am specifically asking about the fact my pension provider does not claim basic rate tax relief on my single payments into my employer's pension scheme and how I claim both basic and higher rate tax relief?"
HMRC replied to say that when the person claimed personal pension relief on their tax return, this would take into account their tax rate.
But the person had another question for the department. They asked: "Except box 1 says 'Payments to registered pension schemes where basic rate tax relief will be claimed by your pension provider' - which is not the case here, so what do I enter and where do I enter it?"
HMRC then advised the person to call the self assessment helpline so they could look into their case.
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They sent them a link to a webpage with details about how to get in touch with an income tax query.
You can call the helpline on 0300 200 3310 with lines open Monday to Friday from 8am to 8pm and on Saturdays from 8am to 4pm.
Research from Vanguard UK and BoringMoney found 25 percent of people nearing retirement have not thought about the tax implications of when they retire.
James Norton, head of Retirement & Investments at Vanguard Europe, said: "Most people need a trigger moment to start pensions planning – whether that’s a looming retirement date or speculated changes to pensions tax as is now being muted for the October UK Budget.
"If the Budget is putting pensions planning front of mind for all, this is no bad thing. It’s very important, however, to take a long-term view, especially amid all the speculation.
"Any changes to your investments should be based on what’s right for you, rather than rumoured tax changes."
