If a persons earnings are below the tax threshold, can they claim relief on their personal pension contributions?
A. Prior to 6 April 2001 all employed earners, but not the self-employed, paid their contributions net of tax and qualified for tax relief on their contributions in this way. This applied even if they were not paying any tax. From 6 April 2001, this method of payment was extended to the self-employed, so everyone now gets tax relief on their contributions even if their earnings are below the tax threshold. People who are not employed but who are eligible to contribute also receive tax relief at basic rate on their contributions, even if they are not taxpayers.
Related Questions
- If I am currently in the process of allocating Tax Relief to cover the Pension and/or 401(k) contributions, do I need to make contributions until the Tax Relief has been allocated?
- Do employers get tax relief on contributions they pay to a personal pension/stakeholder plan on behalf of their employees?
- If a persons earnings are below the tax threshold, can they claim relief on their personal pension contributions?
