Want to make the most of your pension savings? You could claim up to 45% tax relief on contributions, plus carry forward unused allowances. Here’s how to boost your retirement pot with generous HMRC incentives.

Tax relief on private pension contributions is generally available up to 100% of your annual earnings, subject to specific limitations. The relief is applied at your highest rate of Income Tax, which means:

• Basic rate taxpayers are eligible for a 20% pension tax relief.
• Higher rate taxpayers can claim a 40% pension tax relief.
• Additional rate taxpayers are entitled to 45% pension tax relief.

For individuals paying the basic income tax rate, the initial 20% pension tax relief is typically applied automatically by their employer.

Higher and additional rate taxpayers can claim the additional relief through their self-assessment tax return as follows:

• An additional 20% relief on income taxed at 40%
• An additional 25% relief on income taxed at 45%

Alternatively, if taxpayers are subject to 40% income tax and do not submit a self-assessment return, they may contact HMRC directly to request the relief.

These tax relief rates apply to taxpayers in England, Wales, and Northern Ireland. It is important to note that Scotland has some regional variations for Income Tax rates.

Furthermore, there is an annual allowance of £60,000 for pension tax relief. Taxpayers have the opportunity to carry forward any unused portion of this allowance from the previous three tax years, provided they made pension contributions during those years. As of 6 April 2023, the lifetime limit for pension tax relief was abolished, offering greater flexibility in pension contributions without the previous lifetime cap.

MTD for Income Tax kicks off in April 2026 for those earning over £50k. Digital records, quarterly updates, and tougher penalties are on the way. If this affects you, it’s time to get ready.

Designed to modernise the tax system and improve accuracy, MTD will significantly change how Income Tax is reported and paid. With less than a year until the first group of taxpayers must comply, now is the time to prepare.

MTD for Income Tax will become mandatory for self-employed individuals and landlords with annual business or property income exceeding £50,000 from April 2026,. This will require taxpayers to submit quarterly updates to HMRC, maintain digital records, and comply with a new penalty regime for late submissions and payments.

The second phase of implementation will begin in April 2027, extending the requirements to those earning between £30,000 and £50,000. In a further expansion announced during the Spring Statement 2025, MTD obligations will apply to sole traders and landlords with income over £20,000 starting April 2028. The government has also indicated that it is considering the best approach for individuals earning below this threshold.

HMRC is currently contacting taxpayers whose 2023-24 self-assessment returns indicate income near or above the £50,000 threshold. These letters are intended to provide advance notice of upcoming obligations under MTD.

1 May 2025 – Due date for corporation tax due for the year ended 30 July 2024.

19 May 2025 – PAYE and NIC deductions due for month ended 5 May 2025. (If you pay your tax electronically the due date is 22 May 2025).

19 May 2025 – Filing deadline for the CIS300 monthly return for the month ended 5 May 2025.

19 May 2025 – CIS tax deducted for the month ended 5 May 2025 is payable by today.

31 May 2025 – Ensure all employees have been given their P60s for the 2024/25 tax year.

1 June 2025 – Due date for corporation tax due for the year ended 31 August 2024.

19 June 2025 – PAYE and NIC deductions due for month ended 5 June 2025. (If you pay your tax electronically the due date is 22 June 2025).

19 June 2025 – Filing deadline for the CIS300 monthly return for the month ended 5 June 2025.

19 June 2025 – CIS tax deducted for the month ended 5 June 2025 is payable by today.

The Spring 2025 Tax Update brings a series of reforms aimed at simplifying tax administration and reducing burdens for UK businesses. Here’s a breakdown of the key changes:

1. Capital Goods Scheme Simplification

The government plans to simplify the Capital Goods Scheme by removing computers from the assets it covers and increasing the capital expenditure value threshold for land, buildings, and civil engineering work to £600,000 (exclusive of VAT). This change should reduce the number of capital assets within the scheme, making administration easier for small businesses.

2. Spirit Drinks Verification Scheme Overhaul

For those in the spirits industry, a new flat fee of £250 per facility every two years will replace the current verification charges, effective from July 2025. This simplification should bring cost savings and reduce red tape.

3. Corporate Interest Restriction Administration

HMRC is exploring ways to simplify the administrative rules around Corporate Interest Restriction, especially regarding the appointment of reporting companies. This is an ongoing discussion with stakeholders.

4. International Tax Rule Reforms

New draft legislation is being reviewed to modernise rules on transfer pricing, permanent establishments, and Diverted Profits Tax. These reforms aim to align UK rules with global standards and reduce ambiguity for businesses operating internationally.

5. Electronic Invoicing Consultation

The government is seeking feedback on proposed standards for electronic invoicing (e-invoicing), aiming to boost adoption across both the private and public sectors. The long-term goal is to improve efficiency and reduce paperwork.

6. Revisions to Employment Status Tool

The ‘Check Employment Status for Tax’ (CEST) tool is being updated to make it more user-friendly, with revised guidance to help users navigate the updated questions from April 2025.

7. Simplified Employer NIC Elections

From May 2025, employers using a standard form from GOV.UK to transfer NIC liabilities to employees will no longer need HMRC’s pre-approval. This reduces administrative overhead for employers managing share-based pay.

8. Reversal of Proposed PAYE Reporting Rule

Plans requiring employers to provide detailed employee hours via PAYE from 2026 have been scrapped, relieving businesses from potential new reporting obligations.

9. Delay to Payrolling of Benefits in Kind

Mandatory payrolling of benefits in kind has been pushed back a year to April 2027. Employers will have additional time to adjust payroll systems, and HMRC has released updated guidance.

10. New Self-Assessment Thresholds

From 2025-26, the thresholds for trading, property, and other taxable income will be aligned at £3,000 gross. This means up to 300,000 individuals could avoid filing a full Self-Assessment return, instead using a simpler digital reporting service.

These changes are part of a broader drive to make tax simpler, fairer, and more efficient for small businesses.

If you’re approaching retirement age and want to ensure you’re on track to receive your full State Pension, it’s crucial to check your entitlements. Here’s a step-by-step guide to help you navigate the process using official UK government resources.

1. Determine Your State Pension Age

The State Pension age is the earliest age you can start receiving your State Pension. It may differ from the age you can access workplace or personal pensions. To find out your specific State Pension age, use the government’s online tool:

 Check your State Pension age  This tool will also inform you about your Pension Credit qualifying age and eligibility for free bus travel.

2. Check Your State Pension Forecast

Understanding how much State Pension you could receive is essential for planning your retirement. The government’s online service provides a forecast that includes:

• An estimate of how much State Pension you may get
• The date you can claim
• Information on how you might be able to increase entitlements.

 Check your State Pension forecast  To use this service, you’ll need to sign in with your Government Gateway account. If you don’t have one, you can create it during the process. Alternatively, you can request a forecast by post using form BR1:

 Application for a State Pension forecast (form BR19)

3. Review Your National Insurance Recor

Your State Pension is based on your National Insurance (NI) contributions. Generally, you need 35 qualifying years to receive the full new State Pension. To check your NI record, follow this link  Check your National Insurance record.

This service will show you:

• The number of qualifying years on your record,
• Any gaps in your contributions,
• Whether you can pay voluntary contributions to fill those gaps.

4. Consider Paying Voluntary Contributions

If you have gaps in your NI record, you might be able to pay voluntary Class 3 contributions to fill these gaps. This can increase your State Pension amount. Before making any payments, it’s advisable to:

• Check if you’re eligible to pay voluntary contributions.
• Understand how much it will cost.
• Determine how much your State Pension could increase.

 Pay voluntary Class 3 National Insurance

5. Explore Additional Benefits

If you’re on a low income, you might be eligible for Pension Credit, which can provide extra money to help with living costs. It can also open doors to other benefits. For example:

• Help with housing costs.
• Council Tax discount.
• Free TV licence if you are over 75.

 Pension Credit

6. Seek Further Assistance

If you need more information or assistance regarding your State Pension:

• Contact the Pension Service: For queries about State Pension eligibility, claims, payments, and more. 0800 71 0469
• Contact the Pension Service
• Future Pension Centre: For questions about your State Pension forecast.

0800731 0175

Final Thoughts

Taking the time to check your State Pension entitlements ensures you’re well-prepared for retirement. By understanding your State Pension age, reviewing your forecast, and addressing any gaps in your National Insurance record, you can make informed decisions about your financial future.

Always use official government resources to obtain accurate and up-to-date information. If in doubt, don’t hesitate to contact the relevant services for guidance.