HMRC makes it tougher to claim pension tax relief

The UK tax authority is increasing scrutiny of pension tax relief claims made by higher earners in an effort to “protect taxpayers’ money,” as part of a broader initiative to boost revenue collection.

HM Revenue & Customs (HMRC) announced on Thursday that starting September 1st, it has “lowered the threshold” at which claimants must provide evidence to support their pension tax relief requests. In addition, claims can no longer be made by phone and must instead be submitted online or by post.

Last year, the Labour government pledged an additional £555 million annually in HMRC funding, aiming to generate an extra £5 billion in yearly tax revenue by the end of this parliament.

HMRC said it is reducing the evidence threshold for personal pension tax relief claims following a review that found “many claims below the current evidence threshold were incorrect.” The move, it said, is intended to “protect taxpayers’ money.”

Each year, around 80,000 personal pension relief claims are submitted. HMRC’s review of claims under £10,000 showed that one in three required the claimant to amend the amount claimed.

What is pension tax relief?

Pension tax relief is a government incentive that helps you save more efficiently for retirement by reducing the tax you pay on your pension contributions. When you pay into a pension, some of the money that would have gone to HMRC is instead added to your pension pot.  

If you're a basic-rate taxpayer (20%), contributing £80 means the government tops it up with £20, so £100 goes into your pension. Higher-rate taxpayers (40%) and additional-rate taxpayers (45%) can claim back even more through their self-assessment tax return, reducing the real cost of saving even further. It’s one of the most tax-efficient ways to build your retirement fund.

Tax relief is often financially beneficial, but it is important to remember that there are limits and restrictions. For more information, check out our article on how to be tax efficient with your pension contributions.  

What’s changed?

HMRC has made a few changes to claims for tax relief on personal pension contributions which came into effect on 1st September. Below are some of the key changes.

• All pay as you earn (PAYE) claims for pension tax relief must be made online or by post and must be supported by evidence from the pension provider or employer.
• HMRC will not accept claims made via the telephone.  
• All claims must be made using HMRC’s online service or by letter; and all claimants need to provide evidence in support of their claim.  

Prior to 1 September 2025, only those claimants who met the conditions set out in HMRC’s guidance were required to provide evidence. The evidence required is a letter or statement from the pension provider or a payslip from the employer showing:

• The claimant’s full name;
• Details of the pension contributions paid and the tax year they relate to; and
• Where the claim relates to a workplace pension, that the claimant received 20% tax relief automatically from their employer.  
• Evidence needs to be provided for each tax year that a claim is made for.  

For more information please read further on gov.uk.  

If you want to find out more about how you can make the most your pension tax reliefs and allowances, why not give us a call on 0333 323 9065 or book a free non-committal initial consultation with one of our chartered advisers to find out how we might be able to help you.

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This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions.

The Financial Conduct Authority (FCA) does not regulate cash planning or tax advice.