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Important Information for Higher Rate Taxpayers Who Have a Pension With NEST
Higher Rate Taxpayers, whose employer is using NEST as the pension provider, could be missing out on Higher Rate Tax Relief.
Unlike other pension providers, NEST uses ‘relief at source’, which means they claim tax relief back from HM Revenue Customs (HMRC) on behalf of an eligible worker after contributions are paid to them, whereas some pension schemes use a net-pay approach for tax relief, where the employer deducts contributions from a worker’s salary before calculating income tax on the reduced amount.
In order for the relief to be calculated correctly for Higher Rate Taxpayers there needs to be a tax code adjustment or the submission of a tax return. There is also a limit on the level of contributions that can be made to benefit from the relief.
It may be possible to make adjustments going back to the 2016/17 tax year if appropriate action is taken by 5 April 2021.
For help or assistance on this, please do email your usual contact at Peplows or email email@example.com.
06 Feb 2024
Government borrowing fell to £7.8 billion in December 2023 giving Chancellor Jeremy Hunt more scope to make the tax cuts he has hinted at in the Spring Budget.
Tax cut promises may need to be scrapped as a result of the UK being in an 'unfortunate economic and fiscal bind', the Institute for Fiscal Studies (IFS) has warned.
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