How To Claim a Pension Tax Rebate

Have you paid too much tax on your pension income?

Whether you receive a State, company or personal pension through PAYE there are a number of reasons why you may end up paying too much tax.  However, if you have paid too much tax, you can claim a tax rebate from HM Revenue and Customs (HMRC).  Our guide explains all you need to know about claiming a pension tax rebate.

When you may have paid too much tax

There are a number of reasons why you may have paid too much tax on your pension.  Some common reasons include:

  • the amount of annual State Pension included in your tax code is wrong
  • your pension provider has used the wrong tax code
  • your pension provider has the wrong personal information for you
  • your taxable state benefits or other income has reduced and HMRC don’t know about this
  • you have more than one tax code as you have several pensions or employment income

Non UK Resident?
Claim Your Tax Back

Checking your PAYE tax code

Pay As You Earn (PAYE) is the system used by employers and pension providers to deduct tax from your wages or pension.  If your pension is dealt with via PAYE, you can check your PAYE Coding Notice to check what type and amount of tax free allowances you receive.  The PAYE Coding Notice also confirms your tax code which should match your pension payslip.

You may receive several PAYE Coding Notices if you have several pensions taxed through PAYE.

Claiming a pension tax refund

How you go about claiming a pension tax refund depends on your particular circumstances.

  • If you are receiving taxable pension income (including a retirement annuity) through PAYE and you find an error within the current tax year, contact your Tax Office. They will send a revised PAYE Coding Notice to your pension provider and they will adjust your tax code to alter any further payments for that year.  Your pension provider will refund the tax in the next payment.
  • If you are claiming a refund of tax deducted on earnings or pensions for previous tax years then you should write to your Tax Office and include any relevant documents about your earnings/pensions during the tax year for which you are claiming (P45s, P60s etc).  In most cases you will get back the tax you have overpaid as long as you put in your claim on time.  You have between four and six years to submit your claim (depending on which tax year it refers to).

How you will receive your pension tax rebate

HMRC will ordinarily send you a payable order by post.  However, you can tell them to pay the refund directly into your bank or building society account if you prefer.

If you wish, you can also nominate someone else to receive the refund.  It will then be paid to them by post or directly into their building society or bank account.

Non UK Resident?
Claim Your Tax Back

1 comment

  1. Andy Marchington says:

    How does someone who is a partner of their own business reclaim tax relief on contributions which have incorrectly been treated as employer contributions and collected gross with no tax relief given when they should have been treated as self employed contributions and tax relief applied at source by the product provider?

Leave a Reply