When do I have to claim tax relief?

Tax relief

Getting tax relief means that you will get income tax back on your pension contributions.

When you get tax relief on your pension, some of the money that you would have paid in tax goes into your pension pot instead.

Pension tax relief is equivalent to:

  • 20% of the total contributions for basic rate taxpayers (earning up to £50,000 per year)
  • 40% of the total contributions for higher rate taxpayers (earning between £50,001 and £150,000 per year)
  • 45% of the total contributions for additional rate taxpayers (earning more than £150,000 per year – be aware that your pension allowance will reduce dramatically after £150,000)
For example...

Jon is a basic rate taxpayer as he earns £35,000 a year. He made a pension contribution of £100 this month but only paid £80 from income.

Contribution Amount 
 Personal Contribution  £80
 Tax top-up from HMRC  £20
 The total amount going into your pension   £100

Claiming additional tax relief

If you are a higher or an additional rate taxpayer (pay income tax at a rate above 20%) and your workplace pension scheme is operated on ‘relief at source‘, you can be eligible to claim extra tax from the government.

You can check with your employer or your pension provider how your pension scheme is operated. If you are a Husky client, you can contact us to know if you might be eligible to claim additional tax relief.

How does it work?

If your pension scheme is operated on relief at source, it means that your pension contributions have been deducted from your pay after tax is taken.

Your pension provider has claimed the 20% tax relief from the government and automatically added it into your pot. However, as you are a higher or an additional rate taxpayer, you get a 40% (or 45% if you are an additional rate taxpayer) tax relief, and not only 20%.

Therefore, you are eligible to claim back a further 20% (25% if you are a 45% taxpayer) which are returned to you directly by HMRC.

Non-eligible workers

If you normally complete a Self-Assessment tax return, then you should include your pension contributions on the return. The deadline of the Self-assessment tax return is the 31st of January.

If you do not complete an annual tax return, then you can simply contact HMRC:

  • Call HMRC on 0300 200 3300
  • Have your name, address and National Insurance Number with you (available within the app)
  • Have a list of the worker contributions for the tax year/s that you want to claim the tax back for 
  • Explain to HMRC that you are eligible to a tax refund for your pension contributions as you are a higher rate taxpayer and your pension scheme is operated on relief at source basis.

Making workplace pensions work better for you.

Auto-enrolment pensions and Salary Exchange are set up and taken care of for you.

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Download the Husky app

If your employer is with Husky, you can download the Husky for Everyone app for Android or IOS to view the pension contributions you made during the tax year and to learn more about the above. Please contact support@huskyfinance.com to receive the code to link your workplace pension.

If your employer is not with Husky yet, you can refer your employer to Husky to take advantage of all the benefits. Contact us to know more.

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