Adding Money To A SIPP

I started a SIPP last financial year and paid into it this year and last.  I believe I can make back payments for a further 2 years?  How much can I pay in?  How do I assign it to a back payment rather than a payment for the current year?

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  • eskbankereskbanker Forumite
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    You don't assign payments to specific years as such but are you referring to the fact that you can carry forward unused annual allowances of £40K/year, provided you have enough adjusted net income?

    https://www.gov.uk/tax-on-your-private-pension
  • edited 20 October at 1:04AM
    MK62MK62 Forumite
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    edited 20 October at 1:04AM
    I started a SIPP last financial year and paid into it this year and last.  I believe I can make back payments for a further 2 years?  How much can I pay in?
    That depends on how much you've already paid in for the last 2 years, whether you were a member of a recognised pension scheme for the 2 previous years in question, and how much you earn this tax year.
    How do I assign it to a back payment rather than a payment for the current year?
    There is no need to inform anyone or do any "assigning"....HMRC will know from your contributions, and you must use all this tax year's annual allowance before you can use any previous year's unused annual allowances.
    PS - the rules are little complicated if you've not used them before.....make sure you understand them before making payments, as if you breach the rules, you might be liable for a tax charge.
  • dunstonhdunstonh Forumite
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    I believe I can make back payments for a further 2 years?
    No.   It is known as carry forward and it is the previous 3 years plus current.  However, there are some rules about it.
    1 - Carry forward allows you to pay in more (potentially) but the contribution is treated as being made in the current year.   So, you must have sufficient earned income to cover the contribution (or use an employer contribution where applicable)
    2 - You have to use the current year first, then 3 years, 2 years, last year in that order.

    How much can I pay in? 
    Theoretically, £160,000.  However, you need to deduct any pension contributions made (and as above, you need to have the earned income to cover it or an employer contribution).

    How do I assign it to a back payment rather than a payment for the current year?
    You don't.    HMRC know your pension contributions from your NI number.  They can tell if you breach the limits.  Although it can take them 3-4 years to deal with it and in the meantime, you end up paying penalty interest for that period if you get it wrong.


    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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