Tax Relief on lump-sum pension contribution for 2022

kelzer

I want to make a direct lump-sum payment into my company pension and claim back through Revenue site for AVC relief on unclaimed allowance for 2022. I rang revenue and they gave me the figure that can be claimed for 2022. But they said that I will only receive 20% back. I am a bit confused as I'm a higher rate tax payer and was expecting Revenue to return 40% from my AVC claim. Is there another process needed to claim the remainder 20%? Thanks

Allinall

Have you already used up the 40% bracket with pension contributions already made in 2022?

This is the only reason I can think of that would restrict your relief to 20%.

You should be able to see a balancing statement on MyAccount that would show how much earnings you paid at 40%.

kelzer

https://www.boards.ie/discussion/comment/120587789#Comment_120587789

I've only made 3 months of contributions in 2022 and have nearly 10k of unused allowance confirmed by Revenue so not sure why they said only 20% returned. Is this a two-step process where the other 20% is claimed in 2024?

Allinall

If that's the case, then I suspect it was miscommunication on the part of Revenue.

I can't think of any situation where you would only be granted relief at 20%.

Someone else may have a better insight? Or try asking your payroll people.

coylemj

https://www.boards.ie/discussion/comment/120587876#Comment_120587876

Did you pay tax at 40% on a sufficient amount of income to cover both the contributions you already made, plus the lump sum that you propose to make? If so, then you will be entitled to claim back 40%. And by 'contributions already made', I mean voluntary (AVC) plus mandatory contributions.

Your income that was liable for 40% PAYE needs to exceed your gross pension contributions, otherwise you will not get 40% relief on all of your contributions.

kelzer

https://www.boards.ie/discussion/comment/120587916#Comment_120587916

My Net Relevant Income for 2022 was 49334 and I paid 2460 of pension contributions. At the 25% max contribution rate they worked out I can get relief on a 9873 lump-sum payment. But they said at only 20%.

coylemj

https://www.boards.ie/discussion/comment/120587966#Comment_120587966

But how much of that income was liable for 40% tax?

For the sole earner in a married couple, the standard rate (20%) band for 2022 was 45,800. So on that income, you might have paid 40% PAYE but only on a small amount at the very top of your income and the pension contributions that you already paid could have used up all of your 40% relief.

kelzer

https://www.boards.ie/discussion/comment/120588128#Comment_120588128

This could well be the case. Where on Revenue's site can I see exactly the tax paid at 40% for 2022?

coylemj

https://www.boards.ie/discussion/comment/120588173#Comment_120588173

If you mean for you personally, do you still have your last payslip of 2022? That will show how the tax was calculated.

The tax bands for the past few years are shown here..

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/tax-relief-charts/index.aspx