The way pay-as-you-earn (PAYE) taxpayers can make a pension tax relief claim has changed with HM Revenue and Customs (HMRC) confirming all claims must be made online or by letter and include supporting evidence.
Launched on 1 September, this means taxpayers cannot make a claim via a telephone call. All pension tax relief claims will only be accepted online or by post.
What changes has HMRC introduced?
HMRC is trying to modernise its systems and is making a concerted effort to push taxpayers to make all claims and file returns online.
The main change to their pension tax relief claiming process is removing the ability to make a claim via telephone. While they have kept making claims by post, HMRC is keen to ensure taxpayers are using their online services.
In addition to this, the other significant change is asking for all pension tax relief claims to include supporting evidence.
Previously, taxpayers who met the specific criteria in place were asked to provide evidence for their claim, but under the new regulations, all claims will be required to submit supporting evidence.
Your evidence must be a letter or statement from your pension provider or a payslip from your employer.
Those letters or payslips must include your full name, details of pension contributions paid and the tax year they relate to.
They also must show if the claim relates to a workplace pension and if you received a 20 per cent tax relief automatically.
It’s important to remember when filing your claim that you must provide supporting documents for each tax year your claim relates to.
How do the changes affect self-assessment and non-self-assessment taxpayers?
If you are self-employed and are filing self-assessment returns, you can make a pension tax relief claim, but you must make this claim through your tax return.
Whereas, if you are a non-self-assessment taxpayer, there are several reasons why you might file a tax relief claim on pension contributions.
One example is if you are paying Income Tax, in a higher band. Taxpayers who are paying Income Tax at 40 per cent can claim an extra 20 per cent in tax relief.
For basic taxpayers, it is slightly different, so if you are contributing to a company pension scheme that does not claim tax on or where a net pay scheme isn’t in place, you could file a tax relief claim.
What should I do before filing a claim?
Before you consider filing a pensions tax relief claim, you need to analyse your current finances and obtain all your documents, including your pension statements as well as your payslip.
Gathering this information early helps you file the claim at a much quicker pace, but you should also check that you are eligible to make a claim.
This is where you should contact an accountant or finance expert, who will explain how the process works and clarify if you are liable to claim.
Check your eligibility to claim with our team, contact us today.
