reclaiming tax on pension

[Citizen Jake]

Hi guys,

I've been here before asking about reclaiming tax on things like pension and rent. I've been paying into a pension for about 10 years and the year before last reclaimed about 11k in tax. However, the 42pc I should be eligible for reclaiming tax from pension contributions on an ongoing basis never made it to my annual tax credits (therefore it doesn't impact my salary). I asked my company accountant about this and he said that because its a private pension the Revenue Commissioners are wary about awarding credits because individuals could easily walk away from paying the pension and still claim the credits. He advised that I go to my pension company and get the relevant certificate for last year and file a claim in this way on an annual basis. Can anyone verify this.

Jake

 

[ClubMan]

I've been here before asking about reclaiming tax on things like pension and rent. I've been paying into a pension for about 10 years and the year before last reclaimed about 11k in tax.

How much did you earn and how much did you contribute last year?

However, the 42pc I should be eligible for reclaiming tax from pension contributions on an ongoing basis never made it to my annual tax credits (therefore it doesn't impact my salary). I asked my company accountant about this and he said that because its a private pension the Revenue Commissioners are wary about awarding credits because individuals could easily walk away from paying the pension and still claim the credits.

I don't think that this is true. When I used personal pension plans in the past Revenue always granted me an increase in my tax credits/tax free allowances in respect of regular contributions that I was making. On the other hand they did not do this for lump sum contributions which I had to reclaim tax and PRSI/health levy deductions on manually.

He advised that I go to my pension company and get the relevant certificate for last year and file a claim in this way on an annual basis. Can anyone verify this.

Your accountant is most likely not authorised or qualified to give independent, professional pension advice. There are lots of issues other than tax relief to consider when choosing a pension (e.g. charges, selection of funds available, whether or not the employer is contributing on behalf of the employee - if they are then you should seriously consider joining the company scheme, all things - in particular charges - being equal). You should get independent professional advice (from a good multi-agency intermediary or an authorised advisor but not a tied agent) on your pension options and what's best for you. In general occupational pension schemes are a bit less hassle because tax and PRSI/health levy relief are granted via payroll. With personal pension plans you need to notify Revenue of ongoing contributions, lump sums and reclaim tax and PRSI/health levy deductions manually.