Claim back tax from carry forward pension

Hi This year I paid the maximum into my pension to account for last year, and 2 prior years before. This means that I paid an extra 33.5k(there abouts) for 2020-2021 and 33.5k 2021-2022 and my employer paid every year around 6.5k. This using the 40k pension allowance for 2020-2021 and 2021-2022. How do I claim back the taxes on this? I sent a letter to the self assessment team, but I don't know if there is a specific form. Kind regards B.

Hi,

The payment will only give relief for the current year as pension payments are not backdated. You will need to provide evidence of the payment in order to claim so if this is not with your original letter, you will need to write in again.

Thank you.

Hi This seems contrary to that is stated in the website: https://www.gov.uk/guidance/check-if-you-have-unused-annual-allowances-on-your-pension-savings "You will not be taxed on pension savings over your annual allowance if you have enough unused annual allowance from previous years to carry forward. You can carry forward unused allowance from the 3 previous tax years." You will not be taxed - the tax was already taken, carrying it forward means we can claim it. Otherwise "you will not be taxed" looses it's meaning. And look how this guidance doesn't specify "the current year". Meaning if you were taxed for what you put in your pension as per the allowances, carry forward or not, and there is no refund, then it actually means you are taxing pension contributions within the allowances.

Hi, I am not a HMRC Admin but think (or hope) I can help explain it. It is a carry forward of unused pension allowance to the current year. Not a carry back of pension contributions to a previous year. It is to enable you to make a greater contribution in the current year if you've used the current years allowance. Normally if you exceed your annual allowance you'd be liable to a tax charge. But if you have enough annual allowance from the previous years then this would enable you to pay in more (as long as you have sufficient relevant earnings in the year the contribution is made, to cover the increased contribution) without getting a tax charge.

The carrying the unused allowance is clear. The recovery of taxes isn't as the language isn't clear. Pension providers always put an uplift of 20% on the contributions, this is claimed from HMRC. If you put a carry forward, the HMRC contributes the 20% of these contributions - puts back tax it has taken. However some people are on the 40%/45% tax bands, meaning there is extra 20%/25%. This is the missing recovery.

That is what I'm explaining. The contributions are given relief in the year the contribution is made. Let me use numbers to try help demonstrate. Say you earn 100k this year and contribute 60k to your SIPP (we will ignore employers contributions for now to keep it simple, but they also count towards the annual allowance). The provider would add 15k in tax relief bringing the total you contributed to 75k. Normally that would be above your annual allowance and result in a tax charge. But if you had sufficient unused allowance from the previous years, no tax charge would be created. As you added 75k to the pension, your basic rate band would be increased by this amount to 112,700. Now you'd pay 0% on 12570 covered by the personal allowance. That leaves 87430 liable to tax. As this is less than the increased basic rate band, all of it would be due tax at 20% bringing the tax to 17486. Had you not made that contribution you would've paid 20% on 37700 and 40% on 49730, bringing the tax to 27432. And if you'd earned more than 100k then the saving would be more as then you'd be able to use more of the increased basic rate band. If I'm not helping, please say and I'll stop posting. I don't want to confuse matters more for you.

Hi elbruce,
The unused allowance only means that you can pay more than the annual allowance in 1 year without having a tax charge.
Actual tax relief is still limited to your level of earnings - Tax on your private pension contributions
Thank you.

@BellaBoo very nicely and clearly explained.

Hi - I'd like to understand this a bit further with relation of claiming back tax relief for a previous tax year, for a pension contribution made in the following tax year. I've detailed the scenario below. For tax year 2023/24 - i have Taxable earnings of approx £125k, meaning I've lost my personal allowance for that tax year. I'd like to make a pension contribution ahead of the Self Assessment deadline in Jan 2025, for my Self Assessment tax return for 2023/24. Q. If i make a personal pension contribution of say 25k in Jan 2025, will i be able to claim tax relief and offset the earnings for the 2023/24 tax year, or will it only offset earnings in the tax year the pension contribution was made in my case if i go ahead 2024/2025? (which is not what i want, my goal is to claim tax relief for the 2023/24 tax year, by making a pension contribution in Jan 2025 if this is possible?) Is there any way to apply a pension contribution a specific tax year for tax relief in the previous tax year? (CarryBack Rule?) Thank you

Hi,
Tax relief on pension contributions are only due in the tax year the payment is made. they cannot be carried back or carried forward.
Thankyou.

Hi, I think I understand the carry forward rule now. But I can not locate the right place to claim the carry forward pension. Can somebody help? Thanks. 


Name removed admin .

@Xiao Chen Somewhat surprisingly to me too, the Self Assessment form does not ask you to explicitly claim the carry forward of unused Annual Allowance. It just has the one question: "Amount saved towards your pension, in the period covered by this tax return, in excess of the Annual Allowance" It is left up to you to figure out what your Annual Allowance is, including carry forward, and if you went over it, by how much - and just declare the amount saved in excess, if any. Personally, I'd still put as much information as I could into the Additional Information box for the whole return about how I worked out the figure, just so I had the information already there in the return if I was ever challenged about it - but I'm not aware of it being required to do so. I think you could just leave above-mentioned question blank, if you know you have enough carry forward Annual Allowance to cover all your pensions savings. In other words - you don't claim the carry forward - you just don't declare the liability to the extra charge, if you have no liability after considering carry forward.

Hi Xiao Chen,
You do not show this in the tax return as it is only any excess that is shown. the carry forward amounts are for your own referrence only.
Thank you.