How to carry forward annual personal allowance when exceeding £40k limit?

Tim79

Morning All
It appears I have exceeded my £40k annual allowance by £7k and have been warned by my pension provider that I will now be liable to pay a charge/not receive tax relief on this extra £7k.
I have never come close to touching the £40k threshold before so am hoping I can take advantage of the carry forward of the previous year's allowance.
I have searched and searched and although this is something I can do....nowhere does it tell me HOW to go ahead and do this.
Would be ever so grateful if someone can point me in the right direction - do I write to HMRC telling them of my wish? Is there an official form I need to download and fill out? Never had to do self assessment before as my employer always deals with my tax at source. Is it so tricky that I should pay for a financial advisor to do it for me?
Many thanks
Tim

hugheskevi

All that is required is that you calculate whether you have a tax charge to pay or not. If you conclude you do not have a tax charge to pay then no further action is required, but it would be prudent to keep details of your calculations - for example a print-out of the HMRC calculator output - for future reference.

So all you need to do is obtain details of pension inputs from all the pensions you have contributed to in the last 4 years (request Pension Saving Statements which will show this information), along with taxable income details if your total taxable income has exceeded £110,000. Then put the figures into the HMRC calculator to check you have enough carry-forward.

Audaxer

I'm no expert but the HL factsheet PDF document linked from the page below says at the foot of page 3, that you don't need to notify HMRC if you use carry forward, and it suggests you just keep a copy of your calculations:
https://www.hl.co.uk/pensions/contributions/carry-forward-rule
So I assume that HMRC will be able to work out from your previous contributions that you are able to use carry forward for the £7,000 extra contributed last year?

Albermarle

It appears I have exceeded my £40k annual allowance by £7k and have been warned by my pension provider that I will now be liable to pay a charge/not receive tax relief on this extra £7k.

Maybe worth an e mail to the provider , otherwise they might keep bothering you 

along with taxable income details if your total taxable income has exceeded £110,000.

I think has changed just recently and you can earn more before the annual allowance is affected , due to the issues with NHS consultants, GPs etc.

In a move that was designed to ease the burden on some NHS workers from April 2020, both the threshold and adjusted incomes will rise, to £200,000 and £240,000 respectively but the maximum annual allowance for higher earners has been cut further.

hugheskevi

Albermarle said:

along with taxable income details if your total taxable income has exceeded £110,000.

I think has changed just recently and you can earn more before the annual allowance is affected , due to the issues with NHS consultants, GPs etc.

In a move that was designed to ease the burden on some NHS workers from April 2020, both the threshold and adjusted incomes will rise, to £200,000 and £240,000 respectively but the maximum annual allowance for higher earners has been cut further.

It has changed from 2020/21, but the information is still required for years 2016/17 to 2019/20 to calculate carry-forward.

Albermarle

OK and to be clear then and for my own peace of mind.  . As long as you have ( or will have ) earned less than £110K pa during this tax year and the previous three, you can add up to £160K in total to your pension over those four years . Say £35K for three years and then this year £55K ?
Assuming you had the relevant taxable earnings each year.

hugheskevi

Albermarle said:

 As long as you have ( or will have ) earned less than £110K pa during this tax year and the previous three, you can add up to £160K in total to your pension over those four years . Say £35K for three years and then this year £55K ?
Assuming you had the relevant taxable earnings each year.

Yes, that's right, assuming membership of a registered pension scheme during those past 3 years.

Worth nothing that the £110,000 Threshold Income isn't quite the same as taxable income (eg salary sacrifice is added back in to taxable income), but in most cases that usually doesn't matter unless very close to the limit.