RPSM05101160 - Technical Pages: Contributions and tax relief: Member contributions: Entitlement to tax relief: Members without relevant UK earnings

Members without relevant UK earnings

A relevant UK individual who has no relevant UK earnings in a tax year may still qualify for tax relief on contributions into a registered pension scheme up to the ‘basic amount’ in a tax year. The basic amount is currently £3,600. However tax relief can only be given if the contribution is made to a scheme that operates the relief at source (RAS) system.

Example

Pierre may contribute £2,880 into his pension scheme (which operates RAS). The contribution will be increased to £3,600 by way of a payment from HMRC to the pension scheme of £720 (tax relief at the basic rate using the current rate of tax of 20%).

This applies even if the individual is a non-taxpayer.