Including pension contributions on your tax return is essential for maximising available tax relief, particularly for higher earners. This guide explains when and how to report pension contributions during self-assessment.
When to Report Pension Contributions
Not everyone needs to include their pension contributions on their tax return. If your employer deducts contributions from your salary before tax or uses a relief-at-source scheme, your basic rate tax relief – 20% – is usually applied automatically. This is the case for most employees earning under £50,270 per year.
However, higher- and additional-rate taxpayers, earning over £50,270 annually, can claim extra tax relief. This applies if your pension contributions have been made after income tax and National Insurance deductions. Self-employed individuals contributing to private pensions may also need to declare their contributions to claim any additional tax relief.
To understand your responsibilities, you can refer to HMRC guidance on pension tax relief, including relief at source or claiming tax relief yourself.
How to Report Contributions on Your Tax Return
When completing your tax return, you’ll need to declare your gross pension contributions, including any tax relief already added by your provider. For example, if you contributed £800, and your pension provider added £200 in tax relief, you should report £1,000.
Enter this amount in the “Tax reliefs” section under the heading “Payments to registered pension schemes”. If you’ve made one-off contributions, such as additional voluntary contributions, these should be recorded separately in the relevant subsection. For retirement annuities or contributions not deducted from your pay before tax, use the corresponding fields.
Higher-rate and additional-rate taxpayers can claim the extra relief due by entering these contributions. Once processed, HMRC may adjust your tax code or issue a rebate for the difference.
If you are a business or an individual in need of expert advice, locally based accountants can offer support. For example, accountants Chippenham such as Chippendale and Clark provide tailored assistance to ensure compliance and maximise tax efficiency.
Properly declaring pension contributions can significantly impact your financial planning, making this a step worth careful consideration.
