How to use previous years allowances?

Janin1992

I understand that I can pay more than 40K per year into pension if I did not use full allowance last year. How do I do it? Do I just pay into pension say 100K and thats it? Where do I declare that I am using previous years allowance? Do I need to tell it to the pension provider or HMRC?

Thank you.

hugheskevi

Just do it. You do not need to tell either HMRC or provider (although provider may check you are aware of allowance).

You only declare to HMRC if you have exceeded your allowance after using carry-forward.

Remember to ensure you were not subject to a tapered Annual Allowance in previous years.

dunstonh

I understand that I can pay more than 40K per year into pension if I did not use full allowance last year.

Not quite.   You have to use the full 40k this year first, then the unused allowance from 3 years ago, then 2 years ago and then you can use last years unsused allowance.

Do I just pay into pension say 100K and thats it?

Effectively yes.  However, if you are talking about a contribution that high, then it suggests your earnings could be at the level tapering begins on the annual allowance.     There may also be tapering in earlier years too. that you need to consider.

Where do I declare that I am using previous years allowance? Do I need to tell it to the pension provider or HMRC?

HMRC record it against your NI number and measure it electronically against your earnings.    So, if you had earnings of £30k a year and made an individual contribution of £100k, they would pick it and come after you then (about 18-24 months later) and look to tax you and charge penalty interest.

Anon

Sorry for jumping on this thread but it is related. This may be a stupid question, but with you mentioning that HMRC record it against your NI, is this record available to us to know how much has been contributed (I have also read about the lifetime allowance - how do you know where you are in relation to it)? I ask as I understand the £40k limit includes employer contributions and the tax relief, so it would be helpful to see a summary. It can be complicated to calculate if someone contributes through salary (before tax), employer contributes and then considering making additional contributions.

Thank you

Albermarle

From one of your other threads, it is not clear that you have a high enough earned income to put £100K in a pension in one year, although I may be barking up the wrong tree.

dunstonh

is this record available to us to know how much has been contributed 

No. However, you should know.  Its only recent history after all (pension statement for example).   Your pension provider can confirm if you cannot remember.

I have also read about the lifetime allowance - how do you know where you are in relation to it)?

look at your fund value and compare it to the lifetime allowance.

Janin1992

Albermarle said:

From one of your other threads, it is not clear that you have a high enough earned income to put £100K in a pension in one year, although I may be barking up the wrong tree.

Do you mean my cryptotax question? In addition to income from crypto I also have a regular job which provides an additional income. Thank you for reminding that I should not put more than my earned income.