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Consumer Question:
I am self-employed and preparing my tax return for 2022 ahead of the tax filing deadline of November 15 for online returns. I recently opened a Personal Retirement Savings Account (PRSA) and was hoping to make a once-off lump sum contribution to it this year, but I don’t think I’ll be able to afford to do so before the tax filing deadline. Do I need to make the pension contribution before November 15 to be able to claim tax relief on it?
Answer from Mark Reilly, Pension Proposition Lead at Royal London Ireland
If you are self-employed, once a calendar year finishes, you have until October – or mid-November if filing your return online – of the following year to file your tax return. At any point before you file your tax return, you can make a payment into a pension policy and claim tax relief against the previous year. For example, if you make a once-off lump sum payment to your PRSA by the end of 2023 but later than the online tax return deadline of November 15, you will still be able to claim tax relief on your pension contribution – though you would do so when filing your tax return for 2023 next year.
On the other hand, if you can afford to pay your pension contribution before you file your 2022 tax return this November, you can elect to backdate the income tax relief on that pension contribution against the 2022 tax year and therefore claim the relief when filing your 2022 tax return – or you can hold off claiming that relief until filing your 2023 tax return next year. If claiming tax relief on pension contributions, it is important that you upload evidence of those contributions as part of your online tax return.
ENDS
This question was submitted to and first published by The Irish Independent
About Royal London Ireland
Royal London Ireland has a history of protecting its policyholders and their families in Ireland, and recently launched a new Pensions business in Ireland. Our business heritage in Ireland is nearly 200 years. The Caledonian Insurance Company's first office outside Edinburgh opened on Dame Street, Dublin 2 in 1824.
Today, Royal London Ireland is owned by The Royal London Mutual Insurance Society Limited – the largest mutual life insurance, pensions, and investment company in the UK, and in the top 25 mutuals globally, with assets under management of €178 billion, 8.6 million policies in force, and 4,100 employees. Figures quoted are as at 30 June 2023.
Royal London Ireland’s office is based at 47-49 St Stephen’s Green, Dublin 2.