How to Claim a Higher Rate of Tax Relief on Pension Contributions

Written by stephen benham | 13/05/2017
How to Claim a Higher Rate of Tax Relief on Pension Contributions
If your income is more than £37,400 per year, you need to claim higher rate tax relief on your pension contributions. (uk used money image by Digimist523 from

The United Kingdom government encourages you to save for your retirement by providing tax relief on pension contributions. The amount of tax relief you get is determined by the percentage rate of income tax you pay based upon your gross income.

Income tax rates and bands, as of the UK tax year April 6, 2010 to April 5, 2011, are: 20 per cent up to earnings of £37,400, 40 per cent on earnings between £37,401 and £150,000 and 50 per cent above £150,000. Twenty per cent is the basic rate that most pay. If your annual earnings exceed the first tax band, then you need to claim a higher rate of tax relief on your pension contributions.

Check your gross annual income. You can get this from your P60 (annual statement of earnings provided by your employer) or from a recent payslip. If you get your income from your payslip, you need to multiply the figure by 12 or 52, depending on if you are paid monthly or weekly, respectively.

Check your weekly or monthly pension contributions and multiply by 12 or 52 depending on payment frequency. Check your P60 to see your total pension contributions for the tax year.

Get your income tax return by calling your HM Revenue and Customs office. You have to claim higher rate of tax relief on pension contributions when you submit your annual tax return.

Enter your income details on your tax return. Follow the notes that accompany the form to ensure you complete it accurately.

Enter your pension contributions in the appropriate section of the tax return. Complete any other information. Check your entries and then sign and date the form.

Mail the tax return to HM Revenue & Customs. The tax office will calculate the amount of tax relief you are owed. Tax relief of 20 per cent is claimed automatically by your pension provider from the UK government. If you pay tax at 40 or 50 per cent, HM Revenue and Customs will send the tax relief owed on your pension contributions directly to your pension provider.

Things you need

  • Payslips or P60

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