Newsroom

Tax relief on Additional Voluntary Contribution lump sum payments

You are able to pay a lump sum Additional Voluntary Contribution (AVC) via payroll where tax relief is automatically applied, or you can pay a lump sum AVC by direct bank transfer but it will then be your responsibility to reclaim the tax relief via a Self-Assessment tax return or by contacting HM Revenue & Customs (HMRC).  
If you pay a lump sum AVC via payroll tax relief is automatically applied. You do not have to do anything to get the full tax relief (even if you are a higher rate tax payer). This should always be the preferred route. 
 
Alternatively, you can pay a lump sum AVC by bank transfer, however as this will not be transacted via payroll, it will be your responsibility to reclaim the tax back.
 
The Trustee has recently been made aware that some members who have paid AVCs via direct bank transfer are experiencing delays in receiving amounts back from HMRC relating to tax relief.  If this applies to you, you will need to contact HMRC directly - the Trustee or the Scheme administrators are unable to provide any assistance. 
 
The re-claiming of tax can be time consuming and also involves a process that most people will be unfamiliar with. It is therefore recommended that whenever possible if you wish to pay AVCs you do this via payroll. 
 
If you do wish to pay a lump sum AVC at any time which is not via payroll, please contact your Scheme administrator who will be able to guide you through the process and provide you with the relevant payment details.