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How will I know which workers are eligible for tax relief?

It’s important to know whether or not your workers are eligible for tax relief. It’s your responsibility to check with HM Revenue and Customs (HMRC) regarding a worker’s tax relief status.

Workers are eligible for tax relief if they’re under the age of 75 and:

  • they have UK earnings that are subject to income tax for the tax year
  • they’re resident in the UK at some time during the tax year
  • they were resident in the UK at some time during the preceding five tax years when they joined the pension scheme.

Contributions paid after a worker’s 75th birthday aren’t eligible for tax relief.

The maximum amount of contributions on which a worker can claim relief is whichever of the following is greater:

  • the basic amount - currently £3,600 including tax relief
  • the amount of the individual’s UK earnings for the tax year.

This means that a worker who has no relevant UK earnings may still qualify for tax relief on contributions into a registered pension scheme up to the basic amount.

The tax relief is available even if the worker is a non-taxpayer.

If a worker is eligible for tax relief, the tax rate will be determined by where they live, which can be England and N. Ireland, Scotland or Wales. You won’t be able to amend a worker’s tax regime as this will be based on the information provided to us by HMRC.

To claim tax relief on behalf of your workers we’ll need their National Insurance (NI) number. We won’t be able to claim their tax relief without it, so if they have one you’ll need to make sure you’ve included it with their enrolment details. As part of your legal duties you’ll need to provide a worker’s NI number if you have it.

If you don’t have a worker’s NI number when you’re enrolling them, you’ll need to update it later. It’s important you do this as soon as possible so they don’t miss out on any tax relief they’re entitled to. Please see How do I edit a worker’s personal details? for more information on adding a National Insurance number and tax eligibility. 

If any of your workers haven’t told you their NI number, you’re legally required to pass it on to us within a month of you finding out what it is. We can’t claim tax relief on contributions paid before we receive the NI number.

There’s an exception for overseas nationals who are waiting to receive their NI numbers. By law we’re able to claim tax relief for this group of workers without an NI number. You’ll need to let us know if this applies to any of your workers when you’re enrolling them into NEST.

It might be easier to delay enrolling your workers until you have their NI numbers. This can be done as long as you don’t miss any legal deadlines such as the end of the enrolment period. This is the period up to six weeks following your staging date by when you must enrol all eligible workers.

If we have a worker’s NI number, we’ll assume they’re eligible for tax relief unless you tell us otherwise.

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