|
|
Article ID: 819
Last updated: 20 Aug, 2019
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).
This article was:
|
||||||||||
Powered by KBPublisher (Knowledge base software)
Cookie Settings