Confused - Annual Allowance contributions

silvand

Ah I get it now. I thought the annual limit and the tax relief limit was the same thing and becaue I read that I couldn't pay more than my own salary, I thought that my salary (which I wasn't sure how to calculate for the extra pension account) was my personal "annual allowance" so to speak, not knowing i was confusing terminology.


One last question, if I were to accidentally go over my personal contribution limit, would it simply be the matter of not getting 20% tax relief on the x amount I go over or will they change my tax codes? How could I tell if I went over?



Thanks

zagfles

silvand wrote: »

Ah I get it now. I thought the annual limit and the tax relief limit was the same thing and becaue I read that I couldn't pay more than my own salary, I thought that my salary (which I wasn't sure how to calculate for the extra pension account) was my personal "annual allowance" so to speak, not knowing i was confusing terminology.

Don't worry about it - it's a common mistake, you'll even see usually reliable websites and guides get it wrong.

One last question, if I were to accidentally go over my personal contribution limit, would it simply be the matter of not getting 20% tax relief on the x amount I go over or will they change my tax codes? How could I tell if I went over?

You need to work it out, and tell your provider either not to claim/return the excess tax relief, or ask them for a refund of the excess contributions. HMRC might catch up with you eventually if you don't.

silvand

Thanks. I think I'll put a grand less than what I should do just to make sure I don't go over.


Thanks to everyone (especially zagfles) for your help. Your replies have been extremely helpful