HM Revenue and Customs (HMRC) has announced that all pay-as-you-earn (PAYE) pension tax relief claims must be made online or by post with supporting evidence submitted alongside.
Having come into effect on 1 September, the new regulations mean taxpayers will not be allowed to file a pension tax relief claim over the telephone.
The changes mean HMRC will only accept claims made via their online portal or sent through the post.
Why have the changes been made?
As part of its Digital Transformation roadmap, HMRC is changing its processes in a bid to modernise how taxpayers submit returns and file claims online.
They are improving their online systems to ensure taxpayers can file returns and claims more efficiently. While they are encouraging the use of its online portal, HMRC is introducing changes that require taxpayers to complete duties online.
Its latest changes affect pension tax relief claims. The new regulations mean claims cannot be made through a phone call.
Post claims remain in place because many taxpayers could have physical statements and claims made that stretch over several tax years.
HMRC’s other major is requiring all pension tax relief claims to provide supporting evidence.
Prior to the introduction of the new regulations, only taxpayers who met the specific criteria needed to provide evidence, but all claims must now provide supporting documents.
HMRC has clarified that the evidence you submit must either be a pension statement, a letter from your pension provider or your work payslip.
Any supporting documents you submit must include your full name, details about your pension contributions and the tax year those contributions relate to.
Furthermore, the supporting evidence you submit must show if the claim relates to a company pension scheme because you need to clarify whether you received the 20 per cent tax relief automatically.
The more supporting evidence you can provide, the stronger your claim is likely to be.
How will these changes impact taxpayers?
As a PAYE taxpayer, you will need to ensure you have the evidence required and follow HMRC’s guidelines to start filing a claim.
There are many reasons why you may start a pension tax relief claim, including paying a higher rate of Income Tax than the basic standard.
In addition to this, if your employer isn’t claiming tax when you are putting funds into your workplace pension, this means you may be eligible to make a claim.
Similar to this, not having a net pay scheme in place when contributing to a workplace pension also offers an opportunity to claim.
It is slightly different for self-employed individuals who are paying tax via a self-assessment tax return, it’s important to look over your finances and own pension contributions.
Self-employed taxpayers can only file a pension tax relief claim through their online tax returns.
Help is available for taxpayers looking to make a claim
Before filing a pension tax relief claim, it’s important that you understand your current position and collect all support documents, including your pension statements and payslip.
You need to determine if you are eligible to make a claim and this is where a finance expert or accountant can help.
Let us help you check your eligibility, get in touch with our team.