Pension contributions: what you need to declare on your tax return

Make sure you don't forget to declare your pension contributions in your tax return

If you’re completing your 2021/22 self-assessment tax return over the next few days, don’t forget to declare your pension contributions to help reduce your overall tax bill. The deadline to complete the self-assessment tax return by the end of January is fast-approaching, yet according to HMRC, 5.7 million people are yet to file theirs.

Taxpayers routinely omit vital pensions data from their tax returns, forfeiting valuable tax relief or underpaying tax.

Higher-rate taxpayers are most at risk of missing out. If you make regular contributions to a private pension, such as a stakeholder or personal plan, your provider will automatically claim basic-rate income-tax relief on your behalf, reducing the cost of contributing by 20%. But higher-rate and additional-rate taxpayers are entitled to a further 20% and 25% respectively; this relief can only be claimed by declaring your contributions on your annual tax return, so if you don’t provide this information – or you don’t make a return – you won’t get it. Around 250,000 taxpayers make this mistake.

The other side of the coin is that anyone exceeding their annual pension contribution allowance must declare this on their tax return. For most people, the annual allowance is £40,000, though it maybe higher or lower depending on your circumstances. for example, if you are a high earner with an income of £240,000, you annul allowance could be just £4,000 per tax year.

If you’ve gone over your allowance – which by the way is your responsibility to check – you must tell HMRC. You’ll then pay a tax charge. Failing to declare this information means you’ll be paying too little tax, so interest and penalty charges could become payable when the error comes to light.

Already completed your tax return? Don't worry, you still have until 31 January 2023 and can still go in and make changes.

You can add pension details to your tax return under the ‘tax reliefs’ section. 

Recommended

April price hikes - these are the bills going up in April
Personal finance

April price hikes - these are the bills going up in April

Households will be hit with a series of bill increases from April - here’s what they are and how you can save money.
31 Mar 2023
Where will house prices go in 2023?
House prices

Where will house prices go in 2023?

We explore what could happen to house prices in 2023 as the market continues to slow down.
31 Mar 2023
Investors flock to NS&I savings after SVB scare
Savings

Investors flock to NS&I savings after SVB scare

Investors are increasingly pumping their cash into the safety-net of NS&I - lured by increased rates and the security of a government-backed savings a…
31 Mar 2023
Nationwide: UK house prices decline at the fastest pace since 2009
House prices

Nationwide: UK house prices decline at the fastest pace since 2009

UK house prices fell for the seventh month in a row in March, Nationwide’s house price index showed.
31 Mar 2023

Most Popular

Will energy prices go down in 2023?
Personal finance

Will energy prices go down in 2023?

Ofgem’s price cap is now predicted to fall to around £2,000, based on average typical use, for the first time since 2022. We have all the details.
31 Mar 2023
Best areas for buy-to-let in the UK
Buy to let

Best areas for buy-to-let in the UK

If you’re thinking of getting a buy-to-let property you’ll want to know the areas in the country with the highest rental yields
29 Mar 2023
The best one-year fixed savings accounts - March 2023
Savings

The best one-year fixed savings accounts - March 2023

Earn over 4% on one-year fixed savings accounts.
30 Mar 2023