Pension Carry Forward Allowance

burner101

I'm in the fortunate position that I'm likely to receive a retention bonus of ~£73k this year (effectively an additional year's salary) and want to make tax efficient use of this. I'm in a salary sacrafice scheme and understand that there's an annual limit of £40k that I can contrubute.
i understand that i can carry forward previously unused annual allowance from the previous 3 years, and think I've calculated that I can put in an extra £25k into my pension this year (above the standard £40k limit). How do I actually do this though? Is there a form or some such I need to complete for HMRC or my pension provider (L&G) to be able to utilise the carried forward allowance, or is it just used automatically?

hugheskevi

You don't need to do anything,  just make the contributions. Next year you will be told by the provider you exceeded the Annual Allowance, you check you have no charge to pay due to the carry-forward, and if no charge is due that is all - at no stage do you need to inform anyone. Note your provider might check you know you are exceeding the allowance when you make the contribution.

dunstonh

Is there a form or some such I need to complete for HMRC or my pension provider (L&G) to be able to utilise the carried forward allowance, or is it just used automatically?

No.  The onus is on you to self calculate that its good to do it and keep a record of your workings.   HMRC use an automated system that checks pension contributions and earnings against your NI number.   So, it will flag anyone that has exceeded it.  However, it can take multiple years to be flagged.

You contact your employer payroll team, and they will collect it via your payroll.