Why Higher Rate Taxpayers Must Claim Extra Relief
If you are a higher rate (40%) or additional rate (45%) taxpayer contributing to a pension that uses relief at source, you are only getting 20% tax relief automatically. Your pension provider claims basic rate relief from HMRC, but the remaining 20% or 25% must be claimed by you. HMRC estimates that hundreds of millions of pounds in higher rate pension tax relief goes unclaimed every year.
This is not a complex tax planning strategy reserved for the wealthy. If you earn above £50,270 and pay into a personal pension, SIPP, or a workplace scheme that operates relief at source, you almost certainly need to take action to get the full tax benefit you are owed.
Understanding How Relief at Source Works
Most personal pensions, SIPPs, and some workplace schemes use the relief at source method. Under this arrangement, contributions are taken from your net (after-tax) pay. Your pension provider then claims 20% basic rate tax relief directly from HMRC and adds it to your pension pot.
For a basic rate taxpayer, this is the full entitlement. But if you pay tax at 40% or 45%, you are entitled to relief at your marginal rate. The difference between what your provider claims and what you are owed must be reclaimed through one of several routes.
It is important to distinguish this from the net pay arrangement, where contributions are deducted before tax is calculated. Under net pay, you receive full relief at your marginal rate automatically through payroll.
How Much Can You Reclaim?
| Tax Band | Rate | Auto Relief (Provider) | Extra You Claim | Total Relief per £100 Gross |
|---|---|---|---|---|
| Basic rate | 20% | £20 | £0 | £20 |
| Higher rate | 40% | £20 | £20 | £40 |
| Additional rate | 45% | £20 | £25 | £45 |
| Scottish higher rate | 42% | £20 | £22 | £42 |
| Scottish top rate | 47% | £20 | £27 | £47 |
Method 1: Claim Through Self Assessment
The most common way to claim higher rate pension tax relief is through your annual Self Assessment tax return. If you already file Self Assessment (for example, because you are self-employed or have other untaxed income), this is straightforward.
Step-by-step process
- Log in to your HMRC online account at gov.uk
- Navigate to the Self Assessment section for the relevant tax year
- Find the section on tax reliefs – specifically the box for pension contributions where relief at source applies
- Enter the gross amount of your pension contributions (the amount including the basic rate relief already added by your provider)
- HMRC will calculate the additional relief owed and either reduce your tax bill or issue a refund
For detailed guidance on filling in your return, see our guide on pension tax relief on Self Assessment.
Method 2: Contact HMRC Directly
If you do not file a Self Assessment tax return, you can still claim higher rate relief by contacting HMRC directly. There are two ways to do this:
Phone HMRC
Call the HMRC Income Tax helpline on 0300 200 3300. Have your National Insurance number, pension provider details, and contribution amounts ready. HMRC can adjust your tax code for the current year so you pay less tax through PAYE, or issue a refund for previous years.
Write to HMRC
You can write to your local tax office with details of your pension contributions. Include your name, address, National Insurance number, pension provider name, and the gross amount contributed in each tax year. HMRC will review your claim and either adjust your tax code or send a cheque.
Method 3: Tax Code Adjustment
If you make regular pension contributions each year, you can ask HMRC to adjust your PAYE tax code to spread the relief across the year. This means you pay less income tax each month through your salary, rather than waiting until you file your tax return.
To set this up, contact HMRC or use the online service to update your estimated pension contributions. HMRC will issue a new tax code to your employer. Be aware that if your contributions change significantly during the year, you should update HMRC to avoid underpaying or overpaying tax.
Claiming for Previous Tax Years
You can claim higher rate pension tax relief for up to four previous tax years. In 2026/27, this means you can go back to 2022/23. If you have been a higher rate taxpayer for several years and have never claimed extra relief on your relief-at-source pension contributions, the total amount owed could be substantial.
To claim for previous years, you can either amend a previously submitted Self Assessment return (within the filing deadline) or write to HMRC with details of the contributions for each year. HMRC may ask for evidence such as pension statements or certificates of contributions from your provider.
Special Situations
Salary sacrifice pensions
If your employer operates a salary sacrifice arrangement, your pension contributions are made by your employer before tax is applied. You receive full relief at your marginal rate automatically, plus you save on National Insurance. There is no separate claim to make.
Scottish taxpayers
If you pay Scottish income tax, the rates differ from the rest of the UK. Scottish higher rate taxpayers pay 42%, and the Scottish top rate is 47%. Your pension provider still claims 20% basic rate relief, so you need to claim the difference (22% or 27%) through Self Assessment or HMRC.
Contributions to someone else's pension
If you make contributions to a spouse's or child's pension, the pension holder receives the basic rate relief. However, you cannot claim higher rate relief on contributions to another person's pension – only on your own contributions.
How the Relief Is Paid
Higher rate pension tax relief is not paid into your pension pot. Instead, it reduces your income tax bill. This can happen in several ways:
- Reduced Self Assessment bill – the relief is deducted from the tax you owe
- Tax refund – if you have overpaid tax, HMRC sends a refund by cheque or bank transfer
- Adjusted tax code – you pay less income tax each month through PAYE
Unlike basic rate relief which goes directly into your pension, higher rate relief comes back to you as cash (or reduced tax). What you do with it is up to you – many people choose to reinvest it back into their pension to maximise growth.
Annual Allowance Considerations
When claiming higher rate relief, remember that your total pension contributions (including employer contributions) must stay within the annual allowance of £60,000. If you exceed this, you may face a tax charge that could offset the benefit of your contributions. High earners should also be aware of the tapered annual allowance, which can reduce the limit to as low as £10,000.
Checklist: Claiming Higher Rate Relief
- Confirm your pension uses relief at source (check your payslip or ask your provider)
- Calculate your gross pension contributions for the tax year
- Decide your claim method: Self Assessment, phone HMRC, or write to HMRC
- Gather evidence: pension statements, P60, contribution certificates
- Submit your claim before the relevant deadline
- Check previous years – you can go back up to four tax years
- Consider a tax code adjustment for future years if you make regular contributions