AVC for 2005 prior to 31 Oct - Deadlines to get tax refund?

C

Crevanda

Guest
Hi,
I'm looking to max out my AVC allowance of 25% by putting in 19% of my 2005 salary + 25% of bonus to add to the 6% of salary already contributed in a special employee contribution prior to Oct 31st.

Now my understanding of the permissable timing of that to avail of the tax refund is that:
1)the payment has to be received in bythe pension company on or before the 31st that would be the day's price against which the deal would be made. (Documentation of that deal received some 10 or more days later)
2) Tax office informed by letter with copy of 2005 P60 and documentation from above with your statement that the payment was intended for 2005.

So 2nd event would almost inevitably be after 31 Oct - would I have missed the deadline to ask for the refund?


/cDa
 
Very interested in any response to the previous post - I have been to my accountant, my financial advisor, the Revenue and the Pensions Board about this, both in relation to deadlines (E Hobbs implies if you do ROS you get until 16 Nov to pay into the pension plan, but I think this is wrong myself, it's still 31 Oct, it's only pay and file that you can delay slightly by using ROS) and amounts.

I am personally both employed and self employed and want to max my pension contributions for the PAYE segment but I pay tax a year in retard because my self employed accounts run to 30 April so I am only sorting out 2005 PAYE tax accounts/pension now although tax is already paid on those earnings.

The final verdict from all after a lot of confusion and to-ing and fro-ing was that this could only be done using an AVC PRSA. What I did not like was that the PRSA provider's application form implied that only the pay defined in your existing PAYE company pension scheme (which was basic pay in my case; I contributed 6% and so did they to pension) would count in qualifying the total amount of eligible pay for calculating the 25% limit (I'm 45) and thus the amount of the remaining 13% payment, whereas my accountant says it should also include any benefit in kind... I filled it in anyway for the max amount and sent copies of my P60 etc. to the PRSA provider, don't know what will happen...

Anyone else know about this?

All the best

Imogen
 
For what it's worth ... in the past I, as a PAYE employee, have made lump sum contributions to personal pension plans or PRSA plans on or before October 31st and subsequently claimed tax relief after that date with no hassle. As far as I know the October 31st deadline is only for the contribution and not for the tax relief claim.
 
Thanks for the reply ClubMan.

I think I will be going ahead with this but note that you say 'tax relief' in your reply. Is it not a nice big cheque from the taxman by way of refund?

\cda
 
Yes - they normally issue you with refund cheques in respect of tax and PRSI relief granted. Note that you must claim each of these separately.
 
whereas my accountant says it should also include any benefit in kind
Click to expand...

Your accountant is correct.
It is the P60 figure that determines the amount that can be contributed by you up to the max allowed by revenue.
If you have other income small amount revenue will add this to your P60 in the balancing statement and allow the revised salary to be used to determine the amount that can be contributed by you. You can calculate this yourself prior to balancing statement being issued.
 
Thanks asdfg - I forgot to mention it was actually overtime that was the big bug-bear for me rather than the BIK amount, but as with BIK, that overtime was listed within the P60 earnings, so it does count in calculating allowable pension contributions I think, regardless of the PRSA provider's form confusions.

I heaved a sigh of relief when I got my section 30 receipt today, but I suppose the pension providers might still send it back saying it's wrong...

Somehow I always seem to manage to just get the pension payment in on time, then relax a bit too far, thinking "whew, that's done at last", next thing, I will nearly forget to do the ROS return and payment in time for 16 Nov... must remember to set myself some proper reminders...

Imogen
 
Just remember that it is the final P60 that revenue work out the max pension allowed of 2/3 final salary. If you have little or no overtime in your final year then your pension may be reduced below what you expected and you may have overpaid.
 
That is for occupational schemes?

And even then can use a three year average (over anything up to previous ten years) before retirement date.
 
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