Do you have a Personal pension plan or a Subscription payments that you have not claimed tax relief on?
The rules covering claims for tax relief on personal pension payments and subscription payments made in previous years are changing.
For each pound you contribute to a personal pension scheme, the pension provider claims tax back at the basic rate which is currently 20%. In practice, this means that for every £80 you pay into your pension, you end up with £100 in your pension pot.
In addition, if you are a higher tax rate payer, you can claim additional tax relief on the contributions. This additional tax is usually claimed back on your annual self assesment return. If however you have not made this claim in earlier tax years a separate ‘ overpayment relief’ claim can be made
You may also be able to make an ‘overpayment relief’ claim for professional subscriptions that you have incurred which you have not previously claimed for.
Overpayment relief replaces the old ‘error or mistake’ rules for individuals, partnerships and companies from 1st April 2010.
The taxpayer must make the overpayment relief claim within four years of the end of the relevant tax year or accounting period.
This would mean that the earliest period that you can go back to, to make a claim would be the 2006/2007 tax year.
However, there is also a transitional rule that give a longer time limit for income tax returns for the year 2005/2006. If you think you may have a claim for this year, you need to act soon before this transitional period expires.
“Article written by Debra Williams for Professional and Medical March 2011”