Did you pay too much tax last year?

If you are a higher rate or additional rate taxpayer, you may have paid too much income tax in the 2025/26 tax year. When it comes to pension contributions, many higher rate taxpayers are leaving money on the table without realising it.

When you pay into a personal pension or a workplace pension from your salary (not salary sacrifice), basic rate (20%) tax relief is usually added automatically. For example, if you pay £1,000 into your pension, you receive a £250 “top-up” to this contribution from HMRC. This results in £1,250 being added to your pension in total.

Unlike basic rate tax relief, higher rate (40%) and additional rate (45%) tax relief is not added automatically. This extra tax relief must be claimed – if you don’t do this, you stand to miss out on potential tax rebates.

Who does this apply to?

You are a higher rate taxpayer if you earn more than £50,270 in the tax year and will pay income tax at 40% on some of your earnings.

You become an additional rate taxpayer if you earn more than £125,140 in the tax year and will pay income tax at 45% on some of your earnings.

If you are either of these and paid into a personal pension/self-invested personal pension (SIPP) or workplace pension, you are likely to benefit from claiming extra tax relief.

If you made charitable gifts through Gift Aid, you can also claim extra tax relief on these as well.

How is the relief applied?

Once higher rate or additional rate tax relief is claimed, the extra funds are not added to your pension in the same way as basic rate tax relief. Instead, you receive this relief by having more of your income taxed at a lower rate. This is best brought to life with an example scenario:

• Higher rate taxpayer with earnings of £55,270
• £5,000 of their earnings are currently above the higher rate tax threshold, taxed at 40%
• They paid £4,000 into their personal pension, received £1,000 in basic rate tax relief automatically = £5,000 total contribution

If this person claimed their higher rate tax relief, the £5,000 of earnings currently taxed at 40% would be instead be taxed at 20%. This is because HMRC would move their higher rate tax threshold from £50,270 to £55,270 for the tax year as a result of making the £5,000 gross pension contribution.

Claiming the higher rate tax relief would save them £1,000 in income tax, as the £5,000 that was previously taxed at 40% (£2,000) should have been taxed at 20% (£1,000) instead. This is usually either paid out as a tax rebate, by changing your tax code for the following tax year or by reducing your tax liability if you are self-employed.

How do I claim higher/additional rate tax relief?

If you usually complete a tax return through self-assessment, you are asked to declare any contributions made to personal pensions in the relevant tax year. You must make sure that you do this as it will then be factored into your income tax calculation.

If you don’t self-assess, you can use your Government Gateway login to declare your pension contributions to HMRC instead: Claim tax relief on your private pension payments – GOV.UK

You can make claims for the current tax year, as well as the previous four tax years if you did not claim the extra tax relief in those years.

If you think that you are due unclaimed higher or additional rate tax relief from any of the previous four tax years, please get in touch so that we can help you to claim this. It is possible to receive relatively substantial tax rebates, particularly if claiming across multiple tax years.

HMRC won’t chase you to hand money back – which makes this a claim worth making.