Question re pension contributions carry forward

jamesd

BoxerfanUK wrote: »

Regarding her unused allowance from 2015/2016. ... However, can I just check did I get that right? as it seems that year was split into two and I'm a bit confused as to whether she could actually have had more unused allowance than that although it seems a bit confusing when I try to read up on it.

Use the HMRC annual allowance calculator to start, though the PIP issue means it'll probably understate what she can do. The HMRC calculated amount will be safe to use.

Dazed_and_confused

She has had the 25% uplift from the pension provider added for the single contribution so all she has to do now is reclaim the higher rate tax element from HMRC. She's going to try to phone HMRC to see if it can be reclaimed that way rather than having to go through SA.

Don't let her waste her time.

It is too late now to claim tax relief from the current tax year and receive this through a revised tax code.

In view of the large amounts* involved I think she is going to have to provide some evidence of the "relief at source" contributions so she may find it far simpler to complete a Self Assessment return. She is in control of the process then and it should be very simple return for her to complete.

*someone posted a very detailed thread regarding claiming pension tax relief and I think £10k was mentioned as a cut off whereby HMRC want more information. Self Assessment removes this obligation (unless you get investigated!).

BoxerfanUK

Thanks for the link Jamesd, just checked and she is near enough there with what she's paid in bar about 1K so I think we'll leave it at that we are just grateful for all the help from this board.

D&C many thanks I think as you say it may just be easier in the long run to go SA and hopefully her head of finance can help her with that as neither of us have ever filled in a SA before.

Dazed_and_confused

I really don't think she needs the head of finance to help her!

She only needs to complete the parts that are relevant. So ignoring any personal information such as name, date of birth etc which will need to copy two figures from her P60. And anything from a P11D (company benefits) if she gets one.

She probably has some interest to declare and her relief at source pension contributions but that might be it.

Remember pension salary sacrifice is not something that goes on a tax return. She has agreed to give up some of her pay (hence a smaller P60 taxable pay figure) and in return her employer pays into the pension. She isn't paying that part so there is no tax relief she can claim.

BoxerfanUK

Dazed_and_confused wrote: »

I really don't think she needs the head of finance to help her!

She only needs to complete the parts that are relevant. So ignoring any personal information such as name, date of birth etc which will need to copy two figures from her P60. And anything from a P11D (company benefits) if she gets one.

She probably has some interest to declare and her relief at source pension contributions but that might be it.

Remember pension salary sacrifice is not something that goes on a tax return. She has agreed to give up some of her pay (hence a smaller P60 taxable pay figure) and in return her employer pays into the pension. She isn't paying that part so there is no tax relief she can claim.

Thanks again... you've been a big help. :-)

Dazed_and_confused

A good thing to do with Self Assessment is to include the basics, P60 details, company benefits (if any) and things like any interest or dividend income.

Then look at the calculation at that point.

Next add in the relief at source pension contributions and look at the calculation again. Comparing the bottom line on the two will show how much tax the pension contribution has saved (over and above the basic rate tax relief added to the pension fund by the pension company).

Finally take a step back and think does the final outcome make sense. If she is expecting to pay something does the amount look right. Likewise if she is expecting a refund.

Only send it to HMRC when she is comfortable it seems a logical outcome.

And try and persuade her not to leave until 31 January before starting to fill it in!

BoxerfanUK

Dazed_and_confused wrote: »

A good thing to do with Self Assessment is to include the basics, P60 details, company benefits (if any) and things like any interest or dividend income.

Then look at the calculation at that point.

Next add in the relief at source pension contributions and look at the calculation again. Comparing the bottom line on the two will show how much tax the pension contribution has saved (over and above the basic rate tax relief added to the pension fund by the pension company).

Finally take a step back and think does the final outcome make sense. If she is expecting to pay something does the amount look right. Likewise if she is expecting a refund.

Only send it to HMRC when she is comfortable it seems a logical outcome.

And try and persuade her not to leave until 31 January before starting to fill it in!

So should she fill one in asap for 2018/19 tax year? Can she do that now?

greatkingrat

Not yet, as the tax year hasn't finished, but it can be submitted any time after 6th April.

BoxerfanUK

greatkingrat wrote: »

Not yet, as the tax year hasn't finished, but it can be submitted any time after 6th April.

Thank you.

jamesd

If she has work benefits she won't have a P11D on 7th of April but HMRC accept estimates and she can revise later, just tick the box saying the return includes estimated values and explain at the end. That will get her the tax relief in her bank account a few weeks later.

But if she's not already in the self-assessment system it's better to stay out of it and just use phone calls to tell HMRC what they need to know. Not that it's particularly hard, it's fairly easy for simple cases where you keep the required records so you can declare say the amount of savings account interest you received. I tend to just record that monthly on a spreadsheet that works out my estimated end of tax year position for me.