Tax Relief on Carry Forward Pension Contributions

In the tax years 20/21, 21/22, 22/23 I made no pension contributions. Only my employer made contributions into a pension scheme of appr. £4k per year. Each year my salary was above £100k. My understanding is that I therefore have a carry forward allowance from the previous 3 tax years of £36k + £36k + £36k = £108k. I am planning to contribute £100k into my pension this tax year (23/24) year from savings (net pay). Can I claim tax relief on the full £100k or only on the 23/24 pension allowance of £60k.

Hi,

You would be able to carry forward the unused pension relief to add to the 2023 to 2024 relief. As long as your pension payment is below the new revised threshold, the full amount would be available to claim as tax relief.  

If your pension provider claims 20% tax relief from HMRC for your pension payment, you would declare the gross amount, your payment plus the tax claimed, and declare this in your 2023 to 2024 tax return, if you complete one. If a tax return is not required, you would need to claim the relief in writing to HMRC and include supporting evidence of payments made. Your pension provider can supply that information.

Thank you.

My situation is very similar to Robert. In the tax years 20/21, 21/22, 22/23 I made no pension contributions. 2020-2021: my taxable pay £51k, employer's contribution £12k, unused annual allowance £28k 2021-2022: my taxable pay £95k, employer's contribution £14k, unused annual allowance £26k 2022-2023: my taxable pay £119k, employer's contribution £14k, unused annual allowance £26k 2023-2024: my taxable pay £120k, employer's contribution approx £15k, approx unused annual allowance £45k Therefore, I have a carry forward allowance from the previous 3 years of £28k + £26k + £26k = £80k I am planning to contribute gross £75k into my pension this tax year (23/24) year from savings = £60k I pay to personal pension scheme, £15k the pension scheme will claim back from government as basic rate tax relief. This £75k will cover the full allowance in current tax year and will also fully utilise the earliest year (20/21) unused allowance. Can I claim higher tax relief on the full £75k? I believe I will have to declare the the full £75k in my tax returns. But that will be seen by HMRC as pension contribution overpayment and it will raise a tax bill on the amount £15k (£75k minus £60k). HMRC says that I do not need to report carry forward in the tax return. How will HMRC know that I am legitimately using carry forward from 20/21? And if I don't tell HMRC that I am using carry forward because I have unused annual allowance, I will be wrongly taxed on the amount what HMRC will perceive as pension overpayment (£15k). How can I protect myself from wrongly paying tax on the carry forward unused allowance from previous year?

Hi

Yes you can still claim the relief on the 75k pension contribution as your income is higher than this.
The charge for exceeding the annual amount would only be due if you had no unused relief from previous years to cover it.

Thanks

Hi, I'm due to receive a £90k redundancy package... £30k will be tax free, the other £60k I want to pay into my pension to avoid incurring tax. I don't have sufficient allowance left from this financial year for the full £60kt but I do have sufficient from previous year allowances, carried forward. In practical terms, how do I use the previous years allowances? Who checks that I have enough allowance left to accommodate the full £60k? Do I need to tell anyone up front? If I don't tell anyone, do I get taxed on receipt of the redundancy and then have to try and claim it back some how? I don't currently generate a self assessment, it's all done PAYE.

I am in a similar boat and seeking clarity which I have unfortunately yet found by calling or messaging HMRC, I do appreciate they are stretched: I haven't paid in to pension since 16-17 because (at the time when I stopped contributing) of the LTA. I'd now like to make a chunky pension contribution. The HMRC calculator says I have £200K available annual allowance and £160K unused. My questions are: (1) Does this mean that I can contribute up to £160K, although no greater than my earnings this year if that number is lower? (2) I am assuming that if I opt for £160K I'll be using up £60K for this year + £40K for 21/22 + £40K for 22/23 +£20 for 23/4? (3) do I simply pay my pension provider 80% of the above, they top up with basic relief and then I write to HMRC to claim 25% more relief on the gross amount as I have been an additional rate tax payer? (4) I think I have to write to HMRC to make the claim, with all earnings and pension contribution details, and can ask for a payment as opposed to a change in tax code next year if I believe I won't be working next year? Many thanks

Hi Dilligaf720418 Hart,
This forum is for general queries only and is intended to help you self-serve.
We are unable to provide specific advice tailored to individual circumstances.
Contact HMRC
Thank you



 

Hi phil C,
This forum is for general queries only and is intended to help you self-serve. We are unable to provide specific advice tailored to individual circumstances. You can see guidance here:
Tax on your private pension contributions
You may wish to contact our Self Assesment team for advice:
Self Assessment: general enquiries 
Alternatively, you may consider seeking professional advice. 
Thank you.