State pension warning: Opportunity to boost retirement pot by thousands ends next week

The deadline to claim back tax on pension contributions is drawing near
The deadline to claim back tax on pension contributions is drawing near
PA
Georgina Cutler

By Georgina Cutler


Published: 26/01/2023

- 12:34

Updated: 14/02/2023

- 10:20

The clock is ticking for those wanting to boost their state pension pot

The deadline to claim back tax on pension contributions is growing closer, with the last opportunity is set to expire next week.

A self-assessment tax return form will need to be completed before January 31 to avoid receiving a fine from HMRC for late filling and to claim tax relief on pension contributions.


Around 12 million people in total need to file a return but last year, two million missed the deadline and were slapped with an instant £100 fine plus interest on late tax due.

Almost 3.5 million people are yet to file their return for the 2012/22 tax year.

File photo dated 26/01/18 of money, as taxpayers claiming rebates via third parties will have stronger protections under a shake-up to the way repayment agents can operate.
Two million people received fines for filing tax returns late
Dominic Lipinski

Those who don’t usually complete a tax form likely don’t need to again this year – unless personal or financial circumstances have changed.

Anyone who is freelance, self-employed, a small business owner, private landlord or earning over £100,000 a year need to file.

As well as those with more than £10,000 income from savings or investments outside of tax-free ISA or overseas income or gains from Bitcoin and other cryptocurrencies.

Earners that receive more than £50,000 a year who do not complete a return could miss out on tax relief if they have made any pension contributions.

“Savers automatically receive 20 percent tax relief on every contribution they make, but higher and additional rate taxpayers need to claim the extra 20 or 25 percent tax relief,” said Jenny Holt, managing director, customer savings and investments at Standard Life..

The cash is either repaid via a rebate, a change in your tax code or a reduction in this year’s tax bill.

Holt added that maxing tax relief is important for earners who receive between £100,000 and £125,140 as they face a highly punitive tax rate.

Almost 3.5 million people are yet to file their return for the 2012/22 tax year
Almost 3.5 million people are yet to file their return for the 2012/22 tax year
Pixabay

Paying extra pension contributions can also help families who fall foul of High Income Child Benefit Charge which is caused by one parent earning more than £50,000.

Trusha Shah, tax manager at accountancy firm HW Fisher, is urging taxpayers to make a copy of your completed tax return and keep it on file.

She said: “If you are employed or a pensioner, keep all paperwork for 22 months from the end of the tax year. If you are self-employed or letting a property, keep it for five years and 10 months.”

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