If your pre-tax income exceeded £50,000 in the last tax year (2020/21) it is possible that you may have been in a higher rate tax bracket, with some of your income being taxed at 40% instead of 20%. If income exceeded £150,000 then tax at 45% might well have been paid on some of your income.
If you are in employment and paying into a pension scheme, it might be that you have had only basic rate (20%) relief on your pension contributions, so are entitled to claim more. NEST for instance is one such company – instead of paying say £100, you actually have £80 deducted as a contribution, so a further £20 tax relief would be due to you. However, this needs to be claimed.
As an alternative, some pension companies deduct the pension contributions from your gross salary before calculating tax so that you do have the full tax relief.
Ask your employer to clarify the position if you are unsure as to which method is being used.
The second method of securing extra tax relief is where you make payments under Gift Aid. Sponsoring someone for a charity, gifting goods to a charity shop etc , making a payment to the National Trust or indeed any other charity are all likely to qualify and you will be asked to tick a box that you are a taxpayer. Keep a record of these payments! On an £80 donation, the charity can reclaim £20 so they get £100, but you are entitled to an extra 20% or 25% tax relief on the gross £100 as a reduction in your tax – so that £80 only costs you £60 if you are a 40% taxpayer.
Contact us if you need any help to claim or further information.
