Overpaid my pension!

HarryGray

Hi all,
So last tax year I had a workplace pension and a personal pension. I put in £36,000 gross into my personal pension and 'salary sacrificed' £9,000 into my workplace pension (silly I know).
My earnings for the tax year was £36,000 gross. I know my employer can pay in £40,000 gross via salary sacrifice so I work out that I put in £5,000 gross too much last year.

I called Standard Life (personal pension) back in March to explain my situation and whether anything could be done and they said HMRC would contact me if I need to repay anything. 

HMRC have still not contacted me. I am in two minds as to whether to forget about it as HMRC will probably never even look, or fill in a self-assessment tax return and pay back the tax relief? I also struggle to even figure out how much I'd even owe. Also an accountant would charge £150 and my tax bill won't be loads more than that - so it seems like a waste of money. 

Thanks in advanced

OldBeanz

Contact HMRC by phone at 0800hr when they open as it tends to be busy at other times.

garmeg

HarryGray said:

Hi all,
So last tax year I had a workplace pension and a personal pension. I put in £36,000 gross into my personal pension and 'salary sacrificed' £9,000 into my workplace pension (silly I know).
My earnings for the tax year was £36,000 gross. I know my employer can pay in £40,000 gross via salary sacrifice so I work out that I put in £5,000 gross too much last year.

I called Standard Life (personal pension) back in March to explain my situation and whether anything could be done and they said HMRC would contact me if I need to repay anything. 

HMRC have still not contacted me. I am in two minds as to whether to forget about it as HMRC will probably never even look, or fill in a self-assessment tax return and pay back the tax relief? I also struggle to even figure out how much I'd even owe. Also an accountant would charge £150 and my tax bill won't be loads more than that - so it seems like a waste of money. 

Thanks in advanced

You may still be OK if you have any spare carry forward from the previous three tax years.

Gary1984

Yes, unless you've been paying £40k contributions or close to it in each of the last 3 tax years you're probably OK, assuming you had some sort of pension open in your name.

zagfles

HarryGray said:

Hi all,
So last tax year I had a workplace pension and a personal pension. I put in £36,000 gross into my personal pension and 'salary sacrificed' £9,000 into my workplace pension (silly I know).
My earnings for the tax year was £36,000 gross. I know my employer can pay in £40,000 gross via salary sacrifice so I work out that I put in £5,000 gross too much last year.

I called Standard Life (personal pension) back in March to explain my situation and whether anything could be done and they said HMRC would contact me if I need to repay anything. 

HMRC have still not contacted me. I am in two minds as to whether to forget about it as HMRC will probably never even look, or fill in a self-assessment tax return and pay back the tax relief? I also struggle to even figure out how much I'd even owe. Also an accountant would charge £150 and my tax bill won't be loads more than that - so it seems like a waste of money. 

Thanks in advanced

Were your earnings £36k before or after your salary sacrifice? What were your taxable earnings on your P60?

HarryGray

zagfles said:

HarryGray said:

Hi all,
So last tax year I had a workplace pension and a personal pension. I put in £36,000 gross into my personal pension and 'salary sacrificed' £9,000 into my workplace pension (silly I know).
My earnings for the tax year was £36,000 gross. I know my employer can pay in £40,000 gross via salary sacrifice so I work out that I put in £5,000 gross too much last year.

I called Standard Life (personal pension) back in March to explain my situation and whether anything could be done and they said HMRC would contact me if I need to repay anything. 

HMRC have still not contacted me. I am in two minds as to whether to forget about it as HMRC will probably never even look, or fill in a self-assessment tax return and pay back the tax relief? I also struggle to even figure out how much I'd even owe. Also an accountant would charge £150 and my tax bill won't be loads more than that - so it seems like a waste of money. 

Thanks in advanced

Were your earnings £36k before or after your salary sacrifice? What were your taxable earnings on your P60?

Hi, that's gross salary. I called HMRC today and even they don't know how to figure this stuff out. 

To be honest its frustrating because it was their online calculator tool which told me I could contribute excess because I had carry forward available. However I didn't realise you can only contribute personally 100% of your gross earnings. 

I believe my personal contributions are calculated on my gross salary, not on my salary after salary sacrifice. At least I hope I'm right. 

I am trying my best to co-operate with HMRC but they don't seem too interested. 

HarryGray

Gary1984 said:

Yes, unless you've been paying £40k contributions or close to it in each of the last 3 tax years you're probably OK, assuming you had some sort of pension open in your name.

You can only make personal contributions up to 100% of your gross earnings in the relevant tax year though. Carry forward isn't applicable to an individual earning under £40,000 per annum 

zagfles

Answer the question. It's still unclear. "Gross salary" usually means the gross amount you're paid before tax, ie after sal sac as you've sacrificed that salary. You seem to be suggesting before.

So, is the £36k it before or after your sal sac? What are your P60 earnings?

Paul_Herring

You can only make personal contributions up to 100% of your gross earnings in the relevant tax year though.

You can only make contributions attracting tax relief up to the limit of your gross earnings (including said tax relief.)

Carry forward isn't applicable to an individual earning under £40,000 per annum 

Carry forward isn't applicable to an individual with total contributions (including employer) of under £40,000.

But I'm sure someone will be along to correct me shortly...

HarryGray

zagfles said:

Answer the question. It's still unclear. Is it before or after your sal sac? What are your P60 earnings?

Having looked at my P60 it looks like my pay is significantly lower, around £27,000. Although I did change employment and had 3 months employment recorded elsewhere, not sure if that's included in the 27k. 

HarryGray

Paul_Herring said:

You can only make personal contributions up to 100% of your gross earnings in the relevant tax year though.

You can only make contributions attracting tax relief up to the limit of your gross earnings (including said tax relief.)

Carry forward isn't applicable to an individual earning under £40,000 per annum 

Carry forward isn't applicable to an individual with total contributions (including employer) of under £40,000.

But I'm sure someone will be along to correct me shortly...

Hi,

An employers annual allowance is 40k no matter how much you earn and they can use carry forward. An employee can only contribute up to their annual earnings in the tax year in question and therefore if they earn under 40k, they cannot carry forward previous years to contribute more than 40k