Pension Tax Deadline 2024: Everything You Need to Know

Pension & retirement

10 October 2024

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The Pension tax deadline for 2024 is fast approaching, and it is crucial for individuals to know their requirements, especially those who wish to take advantage of tax relief on pension contributions in Ireland. Whether you’re self-employed, an employee in a company pension scheme, or in non-pensionable employment, pensions are a tax-efficient way to save for retirement. This guide will walk you through everything you need to know about meeting the pension tax deadline in 2024, filing tax returns, and making pension contributions.

 

Who Files a Self-Assessment Tax Return?

Individuals who must file self-assessment tax returns in Ireland include:

  1. Self-employed individuals – Those who earn income from a trade or profession.
  2. Proprietary directors – Directors who own more than 15% shareholding in a company.
  3. Individuals with non-PAYE income – People with additional sources of income besides regular employment, such as rental income.
  4. Members of company pension schemes – Specifically, those who pay Additional Voluntary Contributions (AVCs) and wish to backdate income tax relief to the 2023 tax year.

Those who satisfy any of the above conditions will be expected to submit their 2023 Income Tax Return by the due date of 31st October 2024 or 14th November 2024 if using the Revenue Online Service (ROS).

 

Submission of returns through ROS

Filing your tax return electronically through ROS provides a convenient option, but you must register for this service well in advance. For those claiming pension tax relief in Ireland on individual retirement plans, contributions to PRSAs and other tax advantages, the Resident Registration Form (ROS) is mandatory.

To complete the process, the following pension documents must be uploaded by individuals:

  • Date of pension contribution payment
  • Total amount paid
  • Pension contract type
  • Policy or scheme number
  • Name and address of the pension provider
  • Name and address of the customer
  • Confirmation tax relief has not already been provided on the contribution by deduction from salary through payroll

Failure to file on time can lead to interest, surcharges, and the loss of the ability to backdate tax relief to the 2023 tax year.

 

Self-Employed Clients and Pension Contributions

Self-employed individuals must ensure they pay both their pension contributions and submit their tax returns to Revenue by the deadline. Backdated income tax relief is a valuable option for self-employed individuals, as it allows them to reduce their 2023 tax liability by paying a pension contribution in 2024.

 

Steps for Self-Employed Individuals:

  1. Pay the contribution to the life office or PRSA provider by 31st October or 14th November 2024 (if using ROS).
  2. File the tax return by the same deadline to backdate income tax relief to 2023.

 

Maximum Pension Contribution Allowed

The pension contributions allowed for pension tax relief in Ireland are subject to two limits:

1. Age-related percentage limits: The older you are, the higher the percentage of your earnings you can contribute towards your pension for tax relief purposes.

  • Under 30: 15% of earnings
  • 30-39: 20% of earnings
  • 40-49: 25% of earnings
  • 50-54: 30% of earnings
  • 55-59: 35% of earnings
  • 60 and over: 40% of earnings

2. Earnings limit: The ceiling is set at €115,000, and applies to all other pension contributions made (PRSAs, personal pensions and employee/AVC contributions to company pension schemes).

Can Employees Avail of the Pension Tax Deadline 2024?

Yes, employees may also take advantage of this contribution and receive income tax relief backdated to 2023.

However, certain rules apply based on the type of employment and pension arrangement:

  • PRSA or Personal Pension: This applies to employees with Schedule E income in 2023 who were not in a pension plan offered by their employer.
  • AVC or PRSA AVC: This applies to employees who were in their employer’s pension scheme in 2023.

 

Deadlines for Employees:

Employees have an ultimate deadline of 31st October 2024 to make their pension contribution and file their tax return. Where the tax return is being filed through ROS this deadline extends to 14th November 2024.

Employees need to ensure that any tax relief has not already been claimed in the current tax year, particularly if payroll deduction is used towards pension payments. In such cases, income tax relief is automatically applied in the same year.

 

What Happens with Late Returns?

Late returns lead not only to missed deadlines but also may lead to more drastic measures, including penalties or surcharges for taxpayers. More importantly, if you miss the pension tax deadline in 2024, you will not be able to backdate your pension contributions to 2023, and as a result, you will lose the ability to reduce your 2023 income tax liability.

Nonetheless, if you cannot pay the tax due, return filling should be still in time to avoid penalties. Revenue has stressed that timely filing is essential, even where it’s not possible to proceed with full payment at the time.

 

Earning Limits and Individuals with Dual Incomes

For individuals with dual incomes such as those who are both employed and self-employed- pension contributions, and tax relief on pension contributions have some limitations:

  1. Pensionable employment income uses up the earnings limit first. This means in case your pensionable income exceeds the €115,000 earnings limit, you will not be able to claim tax relief on the pension contribution made with your self-employed earnings.
  2. If your total income falls below the €115,000 limit, then the relief pension contribution can be applied proportionally to both income sources.*

*This excludes owners of Ltd companies, as they can contribute unlimited amounts to a PRSA without being restricted by the earning limits or age-based percentage caps typically applied.

 

The pension tax deadline in 2024 is a critical date for individuals in Ireland looking to backdate pension contributions and reduce their 2023 tax liability. Whether you are self-employed, employed, or have multiple sources of income, understanding your tax obligations and ensuring you meet the deadline will help you avoid penalties and maximise your tax relief.

Make sure you file your return and pay any pension contributions on time to take full advantage of this opportunity. If you’re unsure about your specific situation, consulting with a pension advisor can help ensure that you meet all requirements and make the most of your retirement contributions.

 

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Source:

Revenue