Relief at source (RAS) is a way of giving tax relief on contributions a member makes to their pension scheme. RAS is used by personal pension schemes and a few company pension schemes to give tax relief on member contributions.
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A member making a contribution to their pension scheme will automatically get tax relief at the basic rate of 20 per cent. The amount paid to the scheme is treated as having had an amount equivalent to basic rate tax deducted. The scheme administrator claims the basic rate tax relief from HM Revenue & Customs (HMRC) and adds it to the pension pot. This applies whether or not the member pays tax.
For example if a member wants to make a £100 contribution they'll only need to pay £80 into their pension scheme. The scheme administrator reclaims £20 from HMRC making up the pension pot to £100.
If the member is a higher rate taxpayer they can claim any extra tax relief due through their tax return, or by contacting HMRC. If the member is an additional rate taxpayer they'll have to claim the extra relief through their tax return.
Before a scheme administrator can claim back basic rate tax relief on a member's contributions they need the following information about the member:
The scheme administrator also needs details about the member's employment status. The member will make declarations, including one to tell their pension scheme if they make a contribution that doesn't qualify for tax relief.
Pension schemes normally collect all the required information and member declarations as part of the application form to join the scheme. Follow the link below to find the full member information requirements.
The scheme administrator needs to register to claim tax relief. They can do this either online when they're registering the scheme, or later by completing form APSS103 Relief at Source Details. They'll also need to send in a:
Scheme administrators should tell HMRC about any changes to their repayment details by completing a further form APSS103 (and form APSS103A if they're changing who can make repayment claims)
Once registered to claim tax relief, claims for relief on member contributions paid during tax year can be made using form APSS 106 - Registered Pension Schemes: Relief at Source - Annual Claim. Claims for relief must be made within six years of the end of the relevant tax year.
If the scheme administrator doesn't want to wait a year to make a claim they can make an interim claim using form APSS105 Registered Pension Schemes: Relief at Source Interim Claim. These claims can cover a maximum of six tax months (running from the 6th day of a month to the following 5th) but all the months have to fall in the same tax year.
Scheme administrators making interim claims must also complete an annual claim. Interim claims for the period 6th September to 5th October (and any following months) won't be paid until HMRC has the annual claim for the previous tax year.
If HMRC gets the claim by the last working day of the month and is satisfied with the claim, it will normally be paid on the 21st of the following month (or the next working day).
Every year the scheme administrator must complete form APSS107 Registered pension scheme annual statistical return. This must be sent to HMRC by 5 June following the end of the relevant tax year.
At the start of each tax year HMRC will issue a notice to scheme administrators requiring them to give a report of all member contributions paid in the previous tax year. This annual information return can be provided either electronically or on paper - but it must be in a set format. Follow the link below to find out more.
Interim claims for the period 6 September to 5 October (and any following months) won't be paid until the HMRC has the annual information return for the previous tax year.