Great news! You can now claim pension tax relief online!
All you need to do is head over to the government’s online pension tax relief tool, fill out your details, and they’ll get back to you within 28 days (hopefully) with news of your refund.
Pension tax relief is where you get the tax you’ve paid on your income refunded back to you when you make contributions into a personal pension (often called a private pension). You get a refund as saving into a pension is intended to be tax-free, but because you can only add money to a personal pension after you’ve paid tax on your income, you get a refund.
With a workplace pension (a pension from work if you are employed), your contributions go straight into your pension before you pay tax, so no need for a refund.
You get 20% tax relief automatically added to your pension pot (as a 25% bonus), so you don’t need to claim for this. However, you don’t get 40% and 45% tax back automatically, you need to claim it back, which is what this tool is for. So it’s for anyone earning over £50,270 per year, and paying into a personal pension.
Nuts About Money tip: to work out how much tax relief you might get on your pension contributions, use our pension tax relief calculator.
This tool is a bit of a game changer, as previously you’d have to complete a Self Assessment tax return, which can be quite complicated and time consuming for those who don’t need to complete one anyway (they’re for people who are self-employed, or earn income from outside of an employed job).
If you do need to complete a Self Assessment tax return, you should still use it for your pension contributions, nothing has changed for you (so ignore this tool). And if you’d like expert help with your Self Assessment, check out TaxScouts¹, they’ll handle it all for you (and get 12% off with Nuts About Money).
