10th January 2017 at 2:03pm
You have until 31 January 2017 to file your April 2015-April 2016 tax return online.
If you haven’t yet done so, there’s still time to use your tax return to claim back any higher or additional tax relief you are entitled to on contributions you have paid into your pension.
If you don’t, you could lose what’s due to you, here’s how.
Pension tax relief: when – and what – you need to claim
Some pension schemes offered by employers take pension contributions from your pay before any tax is deducted. So, you always get tax relief at your highest possible rate and you don’t need to do anything to claim it.
However, if you contribute to a SIPP or personal pension, which may be the type of arrangement offered by your employer, your contributions are paid from your income after tax has been deducted.
Your pension provider will add tax relief at basic rate (20%) to the amount going in to your pension pot. If you’re a higher or additional rate taxpayer, the additional 20% or 25% tax relief has to be claimed via your self-assessment.
This additional tax relief doesn’t go into your pension but typically reduces the amount of tax you pay in the following tax year.
If you don’t claim it, you could be settling for tax relief at 20% and potentially missing out on thousands of pounds worth of additional relief.
To find more information, read our online guide to maximising your pension tax relief.
On the good news front, if you haven’t claimed in the past you can still claim for the previous three tax years – and that can add up to a sizeable amount.
As an example, if you are a higher-rate taxpayer paying £8,000 each year in to your pension, you will get £2,000 added by your pension provider. You would only receive the extra £2,000 tax relief by completing your self-assessment.
Don’t miss the deadline
While it may seem obvious, if you want to avoid a £100 fine for a late self-assessment return, do it on time.
But the bigger picture is that leaving it late leaves little time to make sure you’ve made the most of all your allowances, including your tax relief – and that could be a missed opportunity to claim what’s rightfully yours.
And when it’s done, you can turn your full attention to getting financially fit for next year’s tax return.
You have until 31 January 2017 to submit your online tax return. The paper deadline was 31 October 2016.
The information in this blog or any response to comments should not be taken as financial advice. Laws and tax rules may change in the future. A pension is an investment and you may get less back than you paid into it.
The information here is based on our understanding in January 2017.
Find more information on this in our guide to pension tax relief.