Higher rate pension tax relief

[117 M34]

Anyone knowledgeable on this please as I want to try and claim it for FY 23/24.

In the last FY, I changed jobs part way through the year. I had an auto enrollment pension in both.

I understand that the workplace will automatically apply the tax savings. However, I earned above the higher rate tax threshold last year (largely in part due to a redundancy payment) but only when the two jobs were combined.

Therefore, I'm thinking that job number 2 wouldn't have known to apply the higher rate element bevause they won't know what i earned in job 1 so I should still be able to claim this back when doing a self assessment, which I need to do to repay child benefit because I earned too much.

 

[Kompany Car]

Anyone knowledgeable on this please as I want to try and claim it for FY 23/24.

In the last FY, I changed jobs part way through the year. I had an auto enrollment pension in both.

I understand that the workplace will automatically apply the tax savings. However, I earned above the higher rate tax threshold last year (largely in part due to a redundancy payment) but only when the two jobs were combined.

Therefore, I'm thinking that job number 2 wouldn't have known to apply the higher rate element bevause they won't know what i earned in job 1 so I should still be able to claim this back when doing a self assessment, which I need to do to repay child benefit because I earned too much.

Hmm I thought redundancy payments under 30k were tax free regardless. If it was over 30k only the part above that value would be taxable.

In fact it is…

https://www.gov.uk/redundancy-your-rights/tax-and-national-insurance

 

[117 M34]

Hmm I thought redundancy payments under 30k were tax free regardless. If it was over 30k only the part above that value would be taxable.

In fact it is…

https://www.gov.uk/redundancy-your-rights/tax-and-national-insurance

The redundancy element was tax free but I got PILON and money for missed commission and none of that was tax free.

 

[halfmist]

The redundancy element was tax free but I got PILON and money for missed commission and none of that was tax free.

So it’s not down to redundancy as you originally stated. In order to claim higher rate tax relief you need to complete a Self Assessment Tax Return for that tax year.
The tax saved does not go in to your pension pot, you can opt to
1)have a tax rebate
2)use it as a deduction for any amounts due on the 31st January 2025 or
3) have your coding notice adjusted so it reduces any future tax bills.
My advice is take the money via rebate.
However if you do have a liability next January HMRC will deduct that liability before refunding as the payment date is so near.

 

[117 M34]

So it’s not down to redundancy as you originally stated. In order to claim higher rate tax relief you need to complete a Self Assessment Tax Return for that tax year.
The tax saved does not go in to your pension pot, you can opt to
1)have a tax rebate
2)use it as a deduction for any amounts due on the 31st January 2025 or
3) have your coding notice adjusted so it reduces any future tax bills.
My advice is take the money via rebate.
However if you do have a liability next January HMRC will deduct that liability before refunding as the payment date is so near.

I think the part that is confusing me is having 2 employers and I'm probably overthinking it.

If I had just 1 employer, would I be able to claim it or would the employer do it all automatically for me?

Is the amount I can claim just for the contributions that I made or for my employer contributions too?

 

[Scottyboi]

Hmm I thought redundancy payments under 30k were tax free regardless. If it was over 30k only the part above that value would be taxable.

In fact it is…

https://www.gov.uk/redundancy-your-rights/tax-and-national-insurance

PILON and holidays most likely.

 

[halfmist]

I think the part that is confusing me is having 2 employers and I'm probably overthinking it.

If I had just 1 employer, would I be able to claim it or would the employer do it all automatically for me?

Is the amount I can claim just for the contributions that I made or for my employer contributions too?

Yes you are over thinking it a bit.
The number of employers you have in a tax year is irrelevant.
Your higher rate tax calculation is based on YOUR total taxable income so exclude the first £30k of redundancy.
Say for example £10k of your taxable income is at the higher rate of 40%.
If YOUR total contributions in to a pension was say £10k (it doesn’t matter with which employer) you are due a tax reduction of a further £2k
The other £2k is claimed by the pension company when you first make the contributions and it is put in your pension pot.
You cannot get any tax relief for your employers contributions.
They claim tax relief on their payments as it is an allowable expense against their taxable profit.
Even with just 1 employer they could not make the claim for you as they would have no idea of any other income outside work and like I said earlier this extra tax relief is never put in to your pension pot