Can I Make Pension Contributions for Last Year?

Yes, you can.

If you wish to claim backdated tax relief for 2021, you will have to ensure that your pension contribution is paid on or before 28 October 2022 AND that you have submitted your claim for tax relief before the tax deadline. This means your payment and your tax relief claim would need to be made before 28 October 2022 or 16th Nov if filling online.

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As 31 October is a Bank Holiday this year, your payment and your tax relief claim would need to be made before Friday, 28 October 2022.
If you pay and file through ROS the deadline is Wednesday, 16 November 2022.

This once-off payment is also known as an AVC or Additional Voluntary Contribution.

I’m an employee. What does this mean for me?

An employee has until 28th October 2022 to:

  1. Pay their pension contribution to the appropriate pension contract (see across), and
  2. Send their tax return to Revenue, electing to backdate the pension contribution to 2021 tax year.

If you pay and file through ROS the deadline is Wednesday, 16 November 2022.

When an employee requests to backdate a payment, they must check to see whether any prior relief has already been granted in the current tax year. Income tax relief is automatic and given in the present year when a contribution is paid through payroll under the net pay arrangement.

Are there any additional incentives for the self-employed?

If you’re self-employed, you can get tax relief on contributions to your pension by making a lump sum single contribution now and backdating it to the previous tax year. This will reduce the amount of tax you pay for 2021. You can make these payments into a Personal Pension or PRSA as part of your annual tax return.

The advantage of self-employed pension contributions is that they may reduce your tax burden for the prior year. Thereby lowering your current year’s tax bill as well. When you start a pension, you get a double bonus since your actual tax rate for 2021 will be lower.

The deadline for making a lump sum payment (Self Employed or AVC) is before the tax deadline; the option to backdate the tax relief to the previous year must also be exercised before that date.

If you are making contributions to a regular savings plan, the contribution must be made by Friday, 28 October 2022.

Are pension funds hit with capital gains tax?

No, the investment growth by the pension fund is not subject to tax (on the investment income or capital gains earned by the pension fund). However, income tax may be levied on pension benefits taken during retirement.

How do I start the process?

1: Make your contribution to your pension. Speak with your advisor or give us a call to sort this bit,
2: Make your revenue return, it must be filed on ROS to claim income tax relief on pension contributions. See www.revenue.ie for more information. If you have any questions about this process and your options, you can contact us.

If you have questions or need advice on Pension Contributions , call 074 9103938 or email now

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