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Posted Sun, 24 Mar 2024 20:37:19 GMT by Matt Boss
Hi, For tax year 2022/23 I had a bump in income and realised part way through the year that I would have a significantly tapered Annual Allowance. Despite pausing my pension contributions I have a tax charge for the year as a result. Having read the guidance I thought I would qualify for my pension provider to pay the charge from my pension pot through 'Scheme Pays'. However they have refused, saying they only need to do this for amounts above the (full non-tapered) Annual Allowance. I am therefore left needing to pay this tax charge myself. I know how much the charge is from my tax return calculations, however my questions are: 1) How do I report this? Do I need to update my 22/23 tax return? 2) Am I liable for interest/ penalties for late payment given the end Jan deadline has now passed? Finally just as a comment it seems unreasonable that the pension companies can use a loophole like this to prevent me from using my own pension pot to pay a tax charge from contributions I have only recently made, when it wasn't clear at the time my annual allowance would be tapered so far. Even more so if I will now incur an interest charge or penalty payment on top. I would appreciate any advice on my two questions and any thoughts on my final point. Many thanks .

Name removed admin 
Posted Wed, 27 Mar 2024 12:20:01 GMT by HMRC Admin 5

Please refer to guidance at HS345 Pension savings — tax charges (2023).
As the due date for 22/23 was 31/01/24, it is likely that interest and penalties will be charged on any additoinal tax that is due.

Thank you

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