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Why am I not receiving tax relief for my pension contributions?You'll only see tax relief for your pension contributions if you pay tax at the higher rate. You make pension contributions net of basic tax. If you are a basic rate taxpayer, you receive tax relief in the form of HMRC topping up your payment by 20%. You get the tax relief automatically if your: For example: If you pay £80 into your pension fund your actual contribution will be £100. If you pay tax at the higher rate of 40%, you'll receive additional tax relief of 20%. When you pay into your pension fund your basic rate band is extended by the gross amount of the contribution so that more of your income is taxed at 20% rather than 40%. The calculations can be seen in step 4 of the TaxCalc Summary (Summary > TaxCalc Summary). |
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