Do I need to tell HMRC anything?

Rodders2409

Hello,

Something's just dawned on me!

Some months ago, having spent time conversing with you lovely people, I increased my contributions through SalSac to below the HRT threshold, however with the companies contributions it pushed my contributions to above the £40K PA limit.

I was told by HR that I needed to reduce my contributions, but because of my new found knowledge I knew somethimng they didn't and advised that I had another £120K of allowance to use up.

They agreed.

Now, should I have then advised HMRC somehow that the over payment was part of my 120K allowance or is it automatic?

Also, how long does the £120K allowance last for ?...can I pay and extra £10K for 12 years?

Thanks

BoGoF

I assume you are talking about the carry forward of unused annual allowance?

If so, are you saying you have made no pension contributions in any of the 3 previous tax years?

What type of scheme is it, DB or DC?

Rodders2409

Thanks for the response,

Yes...unused allowance.
I've always made annual contributions into the scheme alongside company's contributions.
It's a DC scheme and Sal Sac system

BoGoF

Well if you have been making regular contributions in previous years you may not have £120,000 unused allowance to carry forward.

Suggest you have a look here and put your figures into the calculator

https://www.gov.uk/guidance/check-if-you-have-unused-annual-allowances-on-your-pension-savings

Rodders2409

Sorry, I should have said I've made regular contributions in the previous years but only up to about £20K....so I guess I have £60K unsused allowance left. Same questions still apply though...thanks.

Rodders2409

Thanks, just read the link, and can see that I only have three years to use up the unused allowances...which means I'll need to drop my joint contributions in 2020 to below the £40K (as is today).

But do i need to do anything to advise HMRC that I'm utilising the unused allowance or is it automatic?

BoGoF

You don't need to notify them but keep a copy of any calculations in case they ask.

Paul_Herring

But do i need to do anything to advise HMRC that I'm utilising the unused allowance or is it automatic?

You don't need to explicitly tell them, but I'd keep a record of your calculations for future years if you're relying on them.

https://thepeoplespension.co.uk/help/knowledgebase/if-i-want-to-use-carry-forward-to-pay-a-contribution-what-forms-do-i-need-to-complete-and-do-i-need-to-notify-hm-revenue-customs/

You don’t need to use a special form or tell HM Revenue & Customs in advance if you want to use carry forward. If contributions fall within the annual allowance plus carry forward allowances, it won’t be necessary to report anything via a Self-Assessment tax return either.

https://www.gov.uk/government/publications/pensions-tax-charges-on-any-excess-over-the-lifetime-allowance-annual-allowance-special-annual-allowance-and-on-unauthorised-payments-hs345-self/hs345-pension-savings-tax-charges-2017

You don’t need to make any claim to HMRC to carry forward unused annual allowance and you don’t need to show this on your tax return if your unused annual allowance means that an annual allowance charge isn’t due.

michaels

BoGoF wrote: »

Well if you have been making regular contributions in previous years you may not have £120,000 unused allowance to carry forward.

Suggest you have a look here and put your figures into the calculator

https://www.gov.uk/guidance/check-if-you-have-unused-annual-allowances-on-your-pension-savings

Thanks for the link, hadn't seen this site before - luckily it agrees with my calcs.