HMRC has introduced additional checks on pension tax relief claims after finding that a third of claims made by PAYE tax codes were incorrect.
The problem
Contributions into a personal pension are made net of basic rate tax, so only higher and additional rate taxpayers need claim relief. However, HMRC’s review found that many basic rate taxpayers were trying to claim. Claims were also made where relief had already been given through salary sacrifice & net pay arrangements.
To make the situation worse, some claimants had simply guessed their paid pension contributions, rather than using the information provided by their pension provider.
Claims going forward
From 1 September 2025, it is no longer possible to make a claim over the phone; most claims must now be made online. In addition:
Previously, taxpayers only needed to upload or send proof of pension payments made if the payments were in excess of £10,000. HMRC now require all claims to be backed up with supporting evidence each tax year.
For personal pension contributions, this will mean a letter or statement from the pension provider showing the amount contributed.
Postal claims are only possible for those unable to claim online.
Who can claim
Higher and additional rate taxpayers (in Scotland, taxpayers paying the intermediate rate or higher) paying into a personal or workplace pension can make a claim for the additional amount of tax relief for which they are entitled. For example, an additional rate taxpayer will receive a further 25% in relief.
Taxpayers can also make a claim if tax relief is not given automatically on their pension contributions.
HMRC’s guidance on claiming tax relief on pension payments can be found here.
Claims via Self Assessment
These changes have no impact on individuals who complete a self-assessment tax return. Claims for pension relief will continue as normal on the tax return.
Contact us
Please contact us to find out how the above applies in your circumstances and how we can help you.
Please note that the above is for general information only and does not constitute financial or tax advice. You should not rely on this information to make or refrain from making any decisions. You should always obtain independent professional advice in respect of your own situation.
