How to make an AVC with a PRSA

M

Maybrick

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I am self-employed and getting ready to make my first income tax return since setting up a PRSA last year. I would like to reduce my bill as much as possible by making an AVC but am not quite sure how to go about it.

Can anybody tell me - do I just send a cheque to my pension provider and then fill in that amount on my tax return? Do I have to let Revenue know in advance that I'm doing this and/or send them a receipt? Or should my pension provider take care of that for me?

Any help much appreciated.
 
AVCs are made by employed people, who have an occupational pension plan.

It is an extra scheme/plan, added on the main pension scheme.

Surely a self-employed person can't do this?

If they want to increase their conts, they simply make a lump-sum contribution to their existing pension plan.
 
If you wish to make a lump-sum cont to an existing PRSA, you do not tell Revenue in advance.

You make the payment.
Pension insurer issues receipt/Cert, you keep that.

You make have to submit the Cert to Revenue, as you make the tax return, I'm not sure about that.
 
Mostly confirming what @Protocol has said, but FWIW I made a once-off personal contribution to my executive pension plan a few weeks back to reduce my 2019 tax liability. I had to make the payment to the pension provider, send them a letter advising that it was an employee contribution and that it was in respect of the 2019 tax year. My accountant then put this amount in my tax return and submitted it. Accountant suggested I would get a cert from the pension provider to confirm the contribution and I just needed to keep this for my records, no need to submit to Revenue.

The pension provider advised that this contribution would be setup as an AVC within the existing exec pension plan.
 
Apologies, I am relatively new to pensions and may have my terminology mixed up. Yes, I simply mean a lump sum contribution - what are the mechanics for going about it?
 
I hate when people reply to threads with "Have you called them". But in this case given the deadline is Saturday and you have one business day to go, I think regardless of what you hear here you need to be onto your pension provider this afternoon or tomorrow morning to see if you can get it submitted in time!
 
Ah seems you might be right, accountant was obviously turning the screws on me so he could get some of his returns out of the way early :D
 
@Maybrick

You can, send a cheque to the PRSA Provider with a cover note saying that you wish to add the new contribution to your existing policy. If you don't specify otherwise, the money will be invested in the same fund/s that you are already in. Write your policy number on the back of the cheque. Unlikely to get a receipt for the cheque so no harm ringing them and asking if they received it.

You can walk into the Product Providers office and hand them the cheque and they will give you a receipt for it.

You can also ask the intermediary you set the PRSA up through to provide you with the bank details of the PRSA Provider to do an EFT, quoting the policy number as the receivers reference.

You may not get confirmation for a while as a lot of folk are doing the same thing but the money will be invested from the date is is received by the product provider.

You don't need the PRSA (Tax) Certificate when finalising the Revenue Return but if they ask you for it it must have the correct date (before 10th December) on it.



Gerard

www.prsa.ie
 
Thanks Gerard, that's very helpful. So, just to clarify, I don't have to send Revenue anything unless they specifically ask for it? Just fill in the relevant figure on my tax return?
 
My accountant completes my return and their best practice for clients is to get confirmation of pension payment/s before they submit.

If you're doing the return yourself, I don't think that there's a section for uploading proof of single premium payments. I know clients have been asked to provide the proof at a later date though.

If you were applying for a tax rebate by post, I don't think they'd send you a rebate without seeing the proof.


Gerard

www.prsa.ie
 
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