Calculating how much of my annual allowance I have used

Yukster

With quite a lot of help and also used https://www.nhsbsa.nhs.uk/sites/default/files/2017-04/Annual Allowance Example calculations Factsheet v3.0 10.13 - Copy.pdf (calculation 1) I managed to calculate the input amount of my NHS pension for the 2021/22 tax year. I am with the 1995 and 2015 schemes. 

I calculated the input amount of the 1995 scheme based on the assumption that I stayed with it since I initially joined the scheme. I have been advised that for the 2021/22 tax year, the figure for the 2015 scheme will be zero because, for pension input amount purposes, it will be as if everyone had stayed in the 1995 (or 2008) scheme until April 2022.

Having read the blurb about the changes to NHS pension, this sounds right but can I please double-check with anyone here whether you know this to be correct?

hugheskevi

Almost correct. Your 2021/22 pension input will initially be based on 2015 scheme membership, and you will have to pay any charge due. Around October 2023 you will be rolled back into the 2015 scheme and your past pension inputs will be replaced with 1995 scheme membership. So unfortunately you have to go through the whole process based on 2015 membership and pay anything due, even though you know it will soon be all be retrospectively changed.

Yukster

Thanks, hugheskevi.

So the reason for calculating my NHS input amount is to know how much of my AA was used up by my NHS pension, and pay the remaining allowance into my SIPP.  So how do I go about calculating my NHS pension input amount in order not to over-pay into my SIPP? 

hugheskevi

So the reason for calculating my NHS input amount is to know how much of my AA was used up by my NHS pension, and pay the remaining allowance into my SIPP.  So how do I go about calculating my NHS pension input amount in order not to over-pay into my SIPP? 

Depends whether you care about the phaff of having to calculate a tax charge, declare it via Self Assessment, pay it, and then reclaim it in 2023.

If you don't mind doing that, just calculate on basis of 1995 scheme membership as you have done. If you do mind, calculate separately on both a 1995 and 2015 scheme basis, and use the highest pension input figure for NHS to work out how much you can contribute to SIPP to avoid a tax charge. You would probably end up with some unused Annual Allowance once rolled back into 1995 scheme in October 2023, which you could use in 2023/24 or 2024/25.

Yukster

I am an NHS employee plus I am also self-employed so my accountant files my tax return every year. My combined earnings don't exceed £150k. Would you say it is more sensible to ask my accountant to calculate the tax charge if I use the 1995 calculation? In these circumstances would I be able to claim back the charge or would I need to ask my accountant to do that?

When calculating the calculate my input amount on basis of 1995 scheme membership I followed https://www.nhsbsa.nhs.uk/sites/default/files/2017-04/Annual Allowance Example calculations Factsheet v3.0 10.13 - Copy.pdf (calculation 1). Could you advise how to calculate my input amount on the basis of the 2015 scheme membership? Do you or anyone here happen to have a spreadsheet that does this calculation and if so would you mind sharing it?

hugheskevi

Yukster said:

I am an NHS employee plus I am also self-employed so my accountant files my tax return every year. My combined earnings don't exceed £150k. Would you say it is more sensible to ask my accountant to calculate the tax charge if I use the 1995 calculation? In these circumstances would I be able to claim back the charge or would I need to ask my accountant to do that?

When calculating the calculate my input amount on basis of 1995 scheme membership I followed https://www.nhsbsa.nhs.uk/sites/default/files/2017-04/Annual Allowance Example calculations Factsheet v3.0 10.13 - Copy.pdf (calculation 1). Could you advise how to calculate my input amount on the basis of the 2015 scheme membership? Do you or anyone here happen to have a spreadsheet that does this calculation and if so would you mind sharing it?

Calculating the tax charge is very easy once you have pension inputs and know your tapered Annual Allowance position, using the HMRC calculator. The Self-Assessment return will use actual pension inputs based on 2015 scheme.

Either you or accountant could revise position post October 2023.

The process for calculating 2015 scheme pension input is exactly the same as for 1995, just with different pension and lump sum figures. Remember to make allowance for pension accrual between 1-5 April and.

Yukster

Sorry for my ignorance. I know which figures to use for the 1995 calculation but I have no idea which figures to use for the 2015 calculation. Would you be willing to guide me or give an example so I can follow it?

Yukster

I managed to calculate my 1995 and 2015 NHS schemes input amounts. As I understand it, based on advice from hugheskevi my options are:

1. to pay the remaining AA into my SIPP based on the 2015 input amount 
2. to pay the remaining AA into my SIPP based on the 1995 input amount (which leaves me with more unused AA), pay a tax charge, and then reclaim it in 2023

However, I been told by another knowledgeable person that if I go for option 2,  due to the toing and froing involved I will not be asked to pay a tax charge that I will need to claim back later on. Has anyone here seen this published anywhere?