Pensions and tax relief

[LeahPaige]

Hi I'm hoping someone can help with my tax relief calculation for a workplace pension.

Salary - 57k
Pension Deductions - £4560 (10%)

The first 20% tax relief is claimed back by my pension provider, am I right in thinking I can then claim an additional 20% via self assessment?

So £912?

Higher rate band starts £50271, so you are paying higher rate tax on £6729. 40% of 6729 is £2691.60

£4560 pension deduction... so net amount, which you get £912 of tax relief at basic rate. As a higher rate tax payer you can claim up to an additional £912 of tax relief.

£2691.60 of higher rate tax paid, which is higher than £912 of tax relief, so you can claim the full £912.

You can claim that via self assessment, or if this is the only reason you would need to complete a tax return, you can contact HMRC and ask them to apply the tax relief as a change to your tax code. For that to work it would need to be a pension contribution you intend to make on a permanent basis.

Double check how the pension contributions are made - if you can get them made via salary sacrifice it's handy. No pissing about with tax returns to claim back higher rate tax, and both you and the employer save on NI.
(Only issue as far as I can recall might be any payments based on your salary - redundancy, maternity etc - you would want to get assurances around that).

Obvs double check all that because never blindly trust any random on the internet!

Example letter: static.aviva.io/content/dam/document-library/corporate-pensions/mpen15c.pdf

Should be able to tell HMRC about a regular pension contribution via webchat if you can get through, or by phone.

Thanks everyone that's really helpful. I also have to submit a tax return for child benefit tax charge, so could this be done via the same return?

@Paperbagsaremine I did think salary sacrifice was the most efficient way and produced the best savings but after doing these calculations it seems like autoenrolment has a better tax relief? Perhaps I'm not working it out correctly but;

Salary Sacrifice

10% of 57k = £5700
Take home appx = £3233 per month

Auto enrollment

10% of 57k = £4560 + 25% relief (total £5700)
HR tax relief = £912
Take home appx = £3288

I may be working this out completely wrong?

Salary sacrifice is always better afaik because you don't get taxed or pay NI on the sacrificed bit at all.
So you get all the tax relief without any paperwork - because it's just not taxed in the first place - and only incur NI on the post-sacrifice salary.

I think you need to look at how much is going into pension. With salary sacrifice I think it may be near £100'more per month going to pension under salary sacrifice.