How Do I Reclaim Missed Higher Rate Pension Relief Through Self Assessment

Many people assume their pension provider automatically claims all the tax relief they are entitled to. The truth is that personal pension schemes only apply basic rate relief. If you pay higher rate or additional rate tax, the extra relief is not added unless you claim it yourself through Self Assessment. If you forget to claim it, the money is simply left unclaimed until you correct it.

Whether you missed relief this year or several years in a row, you can reclaim it easily once you understand how the system works. This article walks you through every step.

Why Higher Rate Relief Is Missed So Often

In my opinion there are three main reasons people fail to claim their higher rate pension relief:

• they assume their pension provider automatically applies all the relief

• they do not realise pension relief must be claimed on the gross amount

• they do not complete the pension contributions section of the Self Assessment return

Because of this HMRC holds millions in unclaimed tax relief every year. The good news is that you can reclaim it for several past tax years.

How Pension Tax Relief Works

When you pay into a personal pension:

1. You make a net contribution

2. Your pension provider claims 20 percent basic rate relief

3. If you are a higher rate or additional rate taxpayer, you must reclaim the extra relief yourself through Self Assessment

For example:

• You pay £80

• HMRC adds £20

• £100 goes into your pension

• If you are a higher rate taxpayer you can reclaim another £20

• If you are an additional rate taxpayer you can reclaim £25

This extra relief comes back to you through your tax return.

Can You Claim Higher Rate Relief for Past Years

Yes. You can claim relief for the previous four tax years.

This means that if you missed relief in earlier years you can still correct it by amending returns or submitting a formal claim.

What You Need Before You Start

You will need:

• your pension contribution statements

• the gross amount of each contribution

• your Self Assessment login

• details of the tax years you need to correct

Your pension provider’s yearly statement will show both:

• the amount you paid

• the basic rate relief added

• the gross contribution HMRC will use

You must always enter the gross figure on your tax return.

How to Reclaim Missed Higher Rate Relief on the Current Year’s Tax Return

If the tax year is still open you simply reclaim it through the Self Assessment form.

Step 1: Log in to your Self Assessment return

Go to the section for Tailor your return.

Step 2: Tick the box saying you made personal pension contributions

This opens the correct section.

Step 3: Enter the gross pension contributions

Do not enter what you personally paid.
Do not enter the net figure.
Always enter the gross amount, including basic relief.

Example:
You paid £4,000.
Basic relief added £1,000.
Gross contribution = £5,000.
You enter £5,000.

Step 4: HMRC calculates the extra relief

Your tax bill will immediately reduce by the extra higher rate or additional rate relief you are entitled to.

This may come as:

• a reduced payment on account

• a reduced balancing payment

• a refund

• a change in your tax code

How to Reclaim Missed Higher Rate Relief for Previous Years

If you missed relief in earlier tax years you can still correct them, depending on how far back they are.

If the return was filed less than 12 months ago

You can amend the return online.

Steps:

1. Log in to your HMRC account

2. Select the tax year you want to amend

3. Add the gross pension contributions

4. Resubmit the corrected return

HMRC will issue a refund or reduce your tax bill accordingly.

If the return is more than 12 months old but within four tax years

You cannot amend it online, but you can still make a claim for overpaid tax.

Steps:

1. Write to HMRC or use the online form for overpayment relief

2. Include your pension contribution amounts

3. Provide evidence of the gross contributions

4. Request the missing higher rate relief

HMRC will calculate the relief and issue a repayment.

If the return is older than four tax years

Unfortunately HMRC does not allow backdated claims beyond the four year limit.

In my opinion this is why checking each year’s tax return is essential.

Example of How Reclaiming Missed Relief Works

Example 1

You contributed £8,000 personally in 2022 to 2023.
Your provider added £2,000.
Gross contribution = £10,000.

You are a higher rate taxpayer.
Extra relief due = £10,000 x 20 percent = £2,000.

You never filled this in.
You amend your 2022 to 2023 return.
HMRC refunds the £2,000.

Example 2

You contributed £6,000 personally in 2020 to 2021.
You forgot to enter the contribution.
This year is outside the amendment window but inside the four year claim window.
You write to HMRC to request overpayment relief.
HMRC refunds the additional £1,500 relief.

What If You Have Multiple Income Types

Higher rate relief still applies if you have income from:

• PAYE

• self employment

• rental property

• dividends

• savings

As long as your adjusted net income places you in a higher or additional rate band, you can claim the extra relief.

How HMRC Pays You the Extra Relief

The extra relief normally comes in one of three ways:

1. A refund into your bank account

2. A reduction in your tax bill

3. An adjustment to your tax code in the following year

You always receive the money, even if you made no payments on account or had very low tax liabilities.

Why Pension Relief Is Such a Powerful Tool

In my opinion pension contributions provide three major advantages at once:

• they reduce your tax bill

• they reduce adjusted net income for Child Benefit and personal allowance calculations

• they build long term retirement savings

For many higher earners the tax relief alone makes pensions one of the best financial tools available.

Common Mistakes When Reclaiming Relief

Entering the net figure instead of the gross figure

Always enter the gross amount.

Thinking the pension provider claims higher rate relief

They do not. Only basic relief is automatic.

Forgetting to claim in years where income fluctuates

If one year you earn more and fall into higher rate tax you must claim relief for that specific year.

Missing the four year deadline

HMRC will not allow late claims outside this window.

How to Make Sure You Never Miss Relief Again

Keep a yearly record of all contributions

Save your pension statements, preferably digitally.

Double check the Self Assessment section before submitting

Make sure you have entered the gross contributions.

Consider automating contributions

Some people set monthly contributions so they remember every year.

Use an accountant if you are unsure

In my opinion an accountant quickly spots missing relief.

Conclusion

You can reclaim missed higher rate pension relief through Self Assessment easily as long as you know what figures to enter and how far back HMRC will allow claims. Relief for the current year is claimed directly on the return. Relief for earlier years can be reclaimed by amending returns or using the overpayment relief process within the four year window.

In my opinion pension relief is one of the most valuable ways to lower your tax bill and improve long term financial planning. Making sure you claim the correct relief every year is essential, and correcting missed years can result in significant refunds.