Annual Allowance Tax Charge seems incorrect, please help check our maths?

justcheckin

Hello,

I wonder if you good people can help.

My husband has in the last tax year (20/21) for the first time exceeded the annual allowance. He does have c. 9k remaining in carry forward, but has still exceeded this.

We believe we have entered everything correctly into his Self-assessment form online, but the bill yielded at the end is not what we were expecting and so I wonder if there is user error on our part about what is submitted in which box.

The figures for reference:

A.Total paid into pension (SIPP) PLUS PIA of DB scheme: £70136.45
B.AA and carry forward of £49687.64
Figure submitted to HMRC therefore (A-B) was: £20448.81

HMRC have stated a liability of: 

Total pension savings charges (£4234.00000000 minus tax treated as paid £0.00)	£4,234.00

I am unable to reverse engineer the maths that got the SA form to generate this figure. Please can anyone shed any light?

Many thanks.

zagfles

What was his total taxable income?

justcheckin

sum of salaried	42859.35
sum of unsalaried	17179.57 (self employed profit)

zagfles

How much was the SIPP contribution? That will extend the basic rate band. It looks like the AA charge is mostly at 20% but a little at 40%.

justcheckin

Thanks for getting back to me, SIPP contribution (gross) was 28625.

zagfles

Anything else on the tax return? Gift aid, work expenses etc?  Have you downloaded the tax calculation? Maybe you can post that.

If nothing else I make it

Taxable income 42859+17179 = 60038

Minus 12500 PA = 47538

basic rate band 37500 + 28625 = 66125

spare BR band 18587 so 18587 of the AA charge should be @ 20% and  1861 @ 40% , 4461.80

A bit higher than HMRC calculated, so something like gift aid/expenses may explain.

justcheckin

of course sorry, I did not realise gift aid was relevant.

Thank you for posting your workings out.

I believe marriage allowance and gift aid account for the small discrepancy between your figures and the ones on the return.

Many thanks for your help