Would you like to download our mobile app from the App Store?Download
Addison & Co are delighted to announce the launch of their mobile App. This App can be downloaded onto your iPhone, iPad or Android phone. It’s packed full of useful Tax Tables, Calculators and important dates. All of which you will be able to access anywhere you have an internet connection on your device.FIND OUT MORE
The annual allowance for tax relief on pensions is £40,000 for the current tax year. There is also a three year carry forward rule that allows taxpayers to carry forward unused annual allowance from the last three tax years if they have made pension savings in those years. Qualifying taxpayers can get tax relief on private pension contributions worth up to 100% of their annual earnings (subject to the overriding limits). Tax relief is paid on pension contributions at the highest rate of Income Tax paid.
This means that:
The first 20% of tax relief is usually automatically applied by your employer with no further action required by a basic-rate taxpayer. Higher rate and additional rate taxpayers can claim back any further reliefs on their self-assessment tax return.
The above applies for claiming tax relief in England, Wales or Northern Ireland. There are some interesting regional differences if the taxpayer is based in Scotland. If a Scottish taxpayer is paying Income Tax at the starter rate of 19% they will get tax relief of 20% and are not required to pay back the difference. As with the rest of the UK, basic rate taxpayers in Scotland will pay 20% Income Tax and get 20% pension tax relief. There are also three higher rates, an intermediate rate of 21%, a higher rate of 41% and an additional rate of 46% where further tax relief can be claimed.
There is also a lifetime limit for tax relief on pension contributions. The limit is currently £1.03 million. If you are at or near the annual or lifetime limits, please contact us for further advice.
Source: HM Revenue & Customs | 30-05-2018