Why do we ask for pension documents when preparing your self assessment tax return?
At Seed Accounting Solutions, we aim to make sure you’re claiming all the tax relief you’re entitled to. That’s why, if you’ve told us you contribute to a pension, we’ll ask for your pension savings statement. Here’s what you need to know:
What is a Pension Savings Statement?
Pension providers are required to provide a Pension Savings Statement each year.
- If you don’t receive one automatically, you can request it, and by law, they must provide it.
- The statement must be sent by 6th October following the end of the tax year or within 3 months of your request.
Certain circumstances require pension providers to send a statement automatically:
- If your contributions during the tax year exceed the annual allowance.
- If you’ve accessed your pension savings flexibly and your contributions exceed the money purchase annual allowance.
Why does this matter for your tax return?
In the past, pension contributions came directly from gross salary, so tax relief was applied automatically. Today, most workplace pensions are managed through either a Net Pay Arrangement (NPA) or Relief at Source (RAS).
Here’s how they work:
Net Pay Arrangement (NPA)
- Contributions are deducted from your gross salary.
- Tax relief is applied directly through payroll.
- For example, if £100 is deducted from your gross salary, £100 goes into your pension pot.
Relief at Source (RAS)
- Contributions are deducted from your net pay (after tax).
- Your pension provider claims basic rate tax relief (20%) from the government on your behalf.
- For example, if you contribute £100, your provider claims £20, so £120 is added to your pension pot.
If you’re a higher rate or additional rate taxpayer, you may be entitled to extra tax relief on contributions made under RAS. This additional relief must be claimed through your Self Assessment tax return.
Why do we need your pension statement?
We want to make sure:
- All tax relief on your pension contributions has been claimed, either through payroll or your pension provider.
- If you’re eligible for higher or additional rate relief on RAS contributions, we include this in your tax return.
Important: A claim for pension tax relief can only be backdated for 4 years. After that, it’s lost forever.
If you don’t want us to review your pension tax relief, just let us know when you complete your Self Assessment form.