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HMRC formal declarations

HM Revenue and Customs (HMRC) require you to make two formal declarations if you want us to claim tax relief on your personal contributions. Formal declarations:

1. Any pension contributions I make in a tax year, including tax relief, will not add up to more than the larger of these two amounts:

   • my total earnings subject to income tax in the UK
   • £3600.
2. The information I have given is, to the best of my knowledge, correct and complete.

I will give NEST notice of any changes to my tax relief entitlement by the later of these two dates:

• 30 days after the event occurs
• 5 April of the tax year in which the event occurs.

Tax-relief eligibility

If you join NEST as a self-employed person or single person director, contributions must be paid from your personal bank account rather than a business account.

If an individual who is eligible for tax relief pays a pension contribution from a business account and confirms that they're eligible for tax relief, NEST would claim tax relief on that contribution, which would contravene tax law.

At the moment, you're generally eligible for tax relief if you're under the age of 75 and meet one of the following requirements:

• you're resident in the UK
• you pay UK income tax.

You can get more information on qualifying for tax relief by visiting HMRC's website (www.hmrc.gov.uk). If you're eligible for tax relief on contributions this is usually paid on contributions up to the higher of:

• £3600 or
• your relevant UK earnings subject to income tax, excluding dividend income, in that tax year.

If you're a higher-rate taxpayer you could get more tax relief but you'll have to claim this yourself.

Eligibility to join NEST

You can join NEST if:

• you meet the definition of self employed or single person director in NEST's order and rules
• you're aged at least 16 and under 75
• you're working or ordinarily work in the UK and
• you're not subject to the social and labour laws of a European Economic Area (EEA) Country that is not the United Kingtom (UK)

Definition of self-employed

The definition of a self-employed person in NEST's order and rules is someone who is in employment but is not employed by someone else. 'Employment' in this definition includes any trade, business, profession, office or vocation.

Definition of a single person director

The definition of a single person director in NEST's order and rules is someone who is:

• (i)a director or a company and
• (ii)is employed by the company under a contract of employment, where the company does not employ any other person under a contract of employment. 'Company' includes any corporate body.

How to determine if you're subject to the social and labour laws of another EEA country that is not the UK

NEST can't allow you to join the scheme if you’re subject to the social and labour laws of another EEA country that is not the UK. Generally, if you pay tax and National Insurance in the UK, the social and labour laws of another EEA country are unlikely to apply to you.

If you're uncertain whether this applies to you, you should seek independent financial or legal advice.