HNWs urged to claim tax relief as January deadline looms

People paying 50% tax must claim extra tax relief on their pensions before February or risk losing thousands for good, a private bank estimates.

Duncan Lawrie Private Bank has estimated that 250,000 people paying 50% income tax assume their contributions to contract-based company pensions automatically receive 50% tax relief.

However, only the basic rate of 20% tax relief is automatically credited, meaning high net worth individuals are missing out on up to £500m in tax relief every year, according to Duncan Lawrie.

"Higher rate tax payers are responsible for filling in their own self-assessment tax forms and claiming tax relief on their pension contribution," said Simon Bonnett, head of financial planning at Duncan Lawrie.

The deadline for filing claims for tax relief is 31 January 2012, and Her Majesty's Revenue and Customs has recently tightened the rules over backdating claims, Bonnett warned.

"It used to be possible to claim rebates back over seven years, but now the Revenue will only allow four years," he said.