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High earners are missing out on a
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quarter of a million pounds as well as
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losing viable free child support. But
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there's a way around this. Here's how.
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The trick is in your pension. When you
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pay into a private pension pot, you
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automatically get 20% tax relief.
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Meanwhile, higher rate taxpayers would
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also reclaim an additional 20% tax
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relief while additional rate taxpayers
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get 25%. But the problem is you have to
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claim this through self assessment. You
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don't get it automatically and many
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people aren't doing so. If you earn
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between £100,000 and £125,140,
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you're initially hit with a 6% marginal
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tax rate. And this means you lose your
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free child care. But making a pension
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contribution can pull you back under the
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line. If you missed out and claimed back
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this relief, that is £5,000 in 1 year,
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£9,000 in 10 years, and £250,000
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in 20 years. The good news is if you've
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missed claiming it back, you have up to
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four years to do so, potentially getting
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you back £20,000. Have you claimed back?
