Claiming 40% or 45% tax back

If you pay 40% or 45% tax on your income (e.g. your salary), you’ll typically be able to get the tax back on the amount you pay into your own pension (such as a personal pension with Beach). As typically when you save into a pension, the money you add is tax-free!

The government allows this to help you save lots more into your pension, and build up those retirement savings. And technically this is called tax relief.

With Beach, we’ll claim the 20% tax portion of all the money you add into your pension pot, and we’ll automatically add this to your pot. This is actually a 25% bonus (it sounds odd but the maths works out).

With the remaining 20% or 25% (so only for those who pay 40% or 45% tax), you’ll need to request a refund directly from the government. You’ll need to wait until April 6th each year to apply (the start of the new tax year).

It’s important to remember that tax treatment is based on your individual circumstances, so it could be different for you, and the tax rules can change in future.

There’s two common ways to claim your tax back:

1.  Online tax relief service (by the government)

For everyone who doesn’t complete a Self Assessment tax return (such as if you are employed in a job), you can use the government’s tax relief service.

It’s a simpler way of letting the government know about your pension contributions. It’s an online tool, and there’s only a few questions about how much you have saved into your pension this tax year. They will then usually change your tax code for the following year, which effectively reduces the amount of tax you pay on your salary.

Head over to the government tax relief service to start and complete your claim.

2.  If you already complete a Self Assessment tax return

If you are self-employed, or already complete a Self Assessment tax return each year (for any reason), you can add in your pension contributions into the form you complete.

If you have an accountant do this for you, let them know about your pension contributions.

Your pension contributions will then factor into how much tax you owe.  This would normally mean they will reduce your overall tax bill, but could mean you get a cash payment from the government to refund you the tax you've already paid. It will be clearly explained and it depends on your individual circumstances.

If you don’t normally complete a Self Assessment tax return, but still want to for your pension contributions, you can. You’ll need to register first, and before 5th October each year (to file for the previous tax year ending on 5th April).