The InvestEngine Personal Pension operates under relief at source. This means that for every pension contribution we receive our pension provider claims tax relief from HM Revenue and Customs (HMRC) at the basic 20% rate. This process takes between six and eleven weeks but once the funds are received we add this directly to your InvestEngine Personal Pension.
For example, you pay us a contribution of £80 and we claim relief of £20 from HMRC (this being 20% of the gross contribution of £100).
If you are resident in England or Wales you can claim additional tax relief for money you put into relief at source pensions of:
- 20% up to the amount of any income you have paid 40% tax on
- 25% up to the amount of any income you have paid 45% tax on
If you are resident in Scotland you can claim additional tax relief for money you put into a private pension of:
- 1% up to the amount of any income you have paid 21% tax on
- 22% up to the amount of any income you have paid 42% tax on
- 25% up to the amount of any income you have paid 45% tax on
- 28% up to the amount of any income you have paid 48% tax on
If you already submit a Self Assessment tax return then you should claim the additional tax relief through this return. If you are using this process then there is no immediate need to submit any form of evidence. HMRC receive reports from pension providers which will allow them to verify your claim.
If you do not submit a Self Assessment tax return then you should call or write to HMRC to claim the additional relief. The details of how to contact them are shown in this link: Income Tax: general enquiries - GOV.UK. If the additional relief claim is less than £10,000 then there is no immediate need to provide any form of evidence of contributions paid. HMRC require your total gross contribution for the tax year (this being the net contribution plus the tax relief received into the pension).
We have prepared the attached template letter which you can use when requesting your additional tax relief to be paid to you (please see the attachment below).
If the additional relief claim is in excess of £10,000 then the claim must be made in writing and you should enclose evidence. By filtering on “Transactions” on our site you will receive a list of the net contributions and the tax relief received over a period. Please note that cash contributions received from an external source have a transaction type of “SIPP top up” and those contributions that have been paid by a transfer from a different account, i.e. your GIA, have a transaction type of “Portfolio transfer”. Please note though that “Portfolio transfer” will also include transfer within your SIPP portfolios so you may need to highlight the relevant payments when presenting the information to HMRC.
It’s also worth noting that if you add more to your pension AFTER you’ve spoken to HMRC, you’ll need to get in touch again to let them know.
We are currently looking into the creation of a SIPP contribution report however, please note, that in the majority of additional relief applications, you are not required to submit evidence of the contributions paid.
If you made pension contributions in previous years but didn’t claim your additional tax relief you can backdate pension contributions for up to the last four tax years. Claiming tax relief on pension contributions for previous years works in the same methods described above.