If you are a higher rate tax payer, (pay tax at 40% or 50%), and pay into a personal or employers pension scheme, then you may be entitled to claim higher rate tax relief on your pension contributions.
Any payment made into your pension fund is deemed to made net of basic rate tax (i.e. 20%), for every £100 you want to save you only pay £80. HMRC provides tax relief by ‘grossing up’ your contribution, i.e. it pays the additional £20.
Higher rate tax payers are entitled to additional relief, however, this is not an automatic relief and a claim has to be made in writing to HMRC. Claims can be backdated for up to four years, though proof of the gross and net contributions throughout this period need to be provided. Contact us if you think that you may be eligible to claim for additional tax relief on your pension contributions.