When will clients receive their tax relief?

One of the main advantages of SIPPs is that HMRC pay tax relief on personal pension contributions. The current rules are that when a contribution is paid HMRC will pay tax relief of 25% of the net contribution, or 20% of the whole gross figure.

This is however subject to two main factors:

1. The individual is a UK relevant individual. HMRC defines a UK relevant individual as someone who:

  • Is a resident in the United Kingdom at some time during that tax year,
  • was resident in the UK at some time during the five tax years immediately before the tax year in question and they were also resident in the UK when they joined the pension scheme, or
  • has for that tax year general earnings from overseas Crown employment subject to UK tax (as defined by section 28 of the Income Tax (Earnings and Pensions) Act 2003), or
  • is the spouse or civil partner of an individual who has for the tax year general earnings from overseas Crown employment subject to UK tax (as defined by section 28 of the Income Tax (Earnings and Pensions) Act 2003).

2. The individual has UK relevant earnings.* HMRC defines UK relevant earnings as:

  • Employment income, including wages, bonuses and overtime;
  • Income from trade or profession or vocation, for example sole trader income;
  • Income from UK/EEA furnished letting businesses;
  • Patent income.

*If a client does not have any UK relevant earnings but is a UK relevant individual they can still pay in a gross contribution per pension input period totalling £3,600.


For example:
Mrs Jones wishes to make a personal contribution on 20th January 2018 of £10,000 into her SIPP and has earnings of £12,500 in 2017/2018 tax year. HMRC will pay £2,500 tax relief on this contribution as it the total gross figure does not exceed her earnings for the year.

£10,000 (net) x 25% = £2,500
£12,500 (gross) x 20% – £2,500

When paying the contribution into her SIPP the pension provider will report the contribution to HMRC and request the tax relief. This will then be applied to the SIPP at a later date.

The dates in which reports have to be sent to HMRC and when the tax relief is paid are noted below;

Date Contribution made to SIPPDate report sent to HMRCDate relief back by HMRC
6th April to 5th MayBy last working day of May21st June
6th May to 5th JuneBy last working day of June21st July
6th June to 5th JulyBy last working day of July21st August
6th July to 5th AugustBy last working day of August21st September
6th August to 5th SeptemberBy last working day of September21st October
6th September to 5th OctoberBy last working day of October21st November
6th October to 5th NovemberBy last working day of November21st December
6th November to 5th DecemberBy last working day of December21st January
6th December to 5th JanuaryBy last working day of January21st February
6th January to 5th February By last working day of February21st March
6th February to 5th MarchBy last working day of March21st April
6th March to 5th AprilBy last working day of April21st May

In the example of Mrs Jones, as she paid the contribution into her SIPP on the 20th January 2018 her SIPP provider will make a report to HMRC by the last working day of February with the tax relief being received on 21st March.

Should the 21st March fall on a non-working day then it will be received on the next working day thereafter.

At Hartley Pensions Ltd any tax relief is distributed to the clients SIPP account for investing within 24 hours of receipt.

By Richard Cropley | January 26, 2018 | 0 Comments

Leave a Comment

Make an Appointment

Hartley Pensions can not give Financial Advice but our technical team can provide support to your Financial Adviser.  We can arrange for a qualified adviser to speak to you if you require advice.

Contact Us