Higher earners not claiming pension tax relief
Just over a quarter of workers earning more than £41,500 fail to claim the full 40% tax relief they are entitled to on pension contributions, according to research from Prudential.
The provider said the average higher rate taxpayer is missing out on £1,255 a year in pension tax relief. Prudential said this mounted up to about £229m going unclaimed, with an estimated 182,500 taxpayers affected.
The company also claimed the figure could be higher, as an additional 15% of higher rate taxpayers with defined contribution pension schemes do not know whether they claimed their full relief.
Hundreds of thousands of extra people are expected to complete a self-assessment tax return for the first time, including people who have won compensation for mis-sold payment protection insurance (PPI) who are at particular risk of making errors on their returns, according to ACCA.