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

It’s important to know whether your workers are eligible for tax relief, as Nest claims tax relief for eligible workers from HMRC. Please see How is tax relief calculated? for more information. If we have a worker’s NI number and they are under the age of 75, we’ll assume they’re eligible for tax relief unless you tell us otherwise. It’s your responsibility to inform us if a worker is not eligible for tax relief when you enroll them.

Workers are usually eligible for tax relief if they’re under the age of 75 (if they’re 75 years or older, they aren’t eligible) and fit under one of the following categories:

  • 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

You can check with the worker if you’re unsure that the worker meets the above criteria.

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

  • the basic amount - currently £3,600 including basic rate tax relief, for each tax year.
  • the amount of the individual’s relevant 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 and Nest will be able to claim basic rate tax relief for them. The tax relief is available even if the worker is a non-taxpayer.

If a worker is eligible for tax relief, their tax regime (England and N. Ireland, Scotland or Wales) will be based on the information provided to us by HMRC and you won’t be able to change it.

To claim tax relief on behalf of your workers we’ll need their National Insurance (NI) number. We won’t normally 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.

If you do not have a National Insurance number for a worker, we’re able to claim tax relief for overseas nationals who are waiting to receive their NI numbers. You’ll need to let us know if this applies to any of your workers when you’re enrolling them.

If you don’t have a worker’s NI number when you’re enrolling them, you’ll need to update it later. You’re legally required to pass it on to us within a month of receiving it. It’s important you do this as soon as possible, so your workers don’t miss out on any tax relief they’re entitled to.

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