Independent Wealth Management

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Are you claiming your full pension tax relief?

If you are a high rate tax payer with a personal pension, you need to be sure that you are receiving your full income tax relief on your contributions.

When you make a personal pension contribution, basic rate tax relief is automatically applied.  So a £400 net monthly pension contribution becomes a £500 gross monthly pension contribution.  In this example, as a high rate tax payer you are due a further tax refund of £100 for each contribution.  To receive this you need to inform HMRC, which would generally be done using a self assessment tax return.

The problem is that some people simply forget about this.  Others are not in the habit of completing a tax return.  Whilst this is common practice for the self employed, many employed people have not completed a tax return for years.

According to research conducted by the Prudential in 2013, an estimated amount of £229m remains unclaimed.  Remember, in the above example, you could be missing out on £1200 per year.

If this affects you, claims can be backdated by up to 3 years and you need to ensure that you get those annual tax returns in.  This is a reasonably straightforward process, so speak to HMRC or employ an Accountant to organise this for you.

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When my wife and I were looking for advice on retirement financial planning a few years ago, Barry was recommended to us by another IFA, who no longer provided that type of advice. Over the last few years, Barry has provided us with very good financial planning advice, tailored to our particular needs and attitudes to financial risk. He contacts us regularly to update us with the latest information and to see if our needs have changed but leaves the final decisions to us, i.e. he does not try to push a particular financial product or company. We have been very pleased with his advice to date and look forward to continuing our association with him.

Mr K.T.

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