Tapered annual allowance - carry forward

dainerol

I've read what the gov.uk websites say about how to calculate tapered annual allowance but is there a way to check what AA I used in the previous years? Everything that went to my pension pot was as salary sacrifice. I can log into my pension pots and check contributions but I wonder if there is a more official way of checking it, e.g. through HMRC.
Another thing is that in 2019/2020 I didn't use AA at all but I did in the next years. Does it mean I can't carry forward unused AA from 19/20?

NedS

Have you tried using the HMRC AA calculator(s) available here:

http://www.hmrc.gov.uk/tools/annualallowancelimit/

dainerol

NedS said:

Have you tried using the HMRC AA calculator(s) available here:

http://www.hmrc.gov.uk/tools/annualallowancelimit/

I've just used it and put contributions based on transaction history. However, I've just noticed I'm way over £40k this year. It can be a delay between when the money was sent by employer and when received by the pension fund. In my situation I'm not sure it makes a difference because there is around 40k genuinely transferred in 22/23 anyway. 

Is there a way to withdraw overpaid AA in the current year? So, just to summarize:
- If I'm correctly adding all numbers I've (my employer) paid over 50k this year into pension (through salary sacrifice)
- there are unused AA from last two years which cover the amount overpaid this year.
- my AA will be tapered and some of what I've contributed will be taxed.

NedS

There is no way to have contributions refunded if you have exceeded the AA. You must declare that you have exceeded the allowance and pay the tax that is due.

dainerol

NedS said:

There is no way to have contributions refunded if you have exceeded the AA. You must declare that you have exceeded the allowance and pay the tax that is due.

Will I see what I owe when filling self assessment or will I need to calculate what I exceeded myself?

NedS

dainerol said:

NedS said:

There is no way to have contributions refunded if you have exceeded the AA. You must declare that you have exceeded the allowance and pay the tax that is due.

Will I see what I owe when filling self assessment or will I need to calculate what I exceeded myself?

Sorry, I don't know - I've never completed a SA tax return or exceeded the AA.

artyboy

dainerol said:

NedS said:

There is no way to have contributions refunded if you have exceeded the AA. You must declare that you have exceeded the allowance and pay the tax that is due.

Will I see what I owe when filling self assessment or will I need to calculate what I exceeded myself?

I've never seen my pension contributions populated for me on a SA - in the same way that it never tells you how much gross savings interest you received... it's up to you to work it out and hope you aren't wrong, because you can bet that HMRC knows...

Fortunately though, you don't get penalties for innocent mistakes. Only for being careless 

Cus

I find this tapered allowance odd. I complete a self assessment annually, and I don't see any part to tell hmrc how much I paid into my pension via salary sacrifice.  I do a rough calculation to ensure that the amount I contribute (and matched by employer) is within the tapered allowance calcs as per my salary, but nothing in my employment system stops me just upping my salary sacrifice to the max. How will it be identified by HMRC?

Dazed_and_C0nfused

Cus said:

I find this tapered allowance odd. I complete a self assessment annually, and I don't see any part to tell hmrc how much I paid into my pension via salary sacrifice.  I do a rough calculation to ensure that the amount I contribute (and matched by employer) is within the tapered allowance calcs as per my salary, but nothing in my employment system stops me just upping my salary sacrifice to the max. How will it be identified by HMRC?

Salary sacrifice means you aren't contributing, that's why you don't get any pension tax relief added by the pension company.

You are agreeing to a lower salary in return for increased employer contributions.

You would need to tailor your return correctly to see the annual allowance section.

dainerol

Am I correct that the adjusted income (the one where going over £240k reduces AA by £1 for every £2 over) is based on net income?
E.g. I can see on my payslip that total taxable pay is £200k, net would be something around 120(?), and £50k of salary sacrifice into pension (some of it was carried forward from previous years). Does this mean my adjusted income is right now £120k + £50k?

edit: after further reading I think it is  £200k + £50k, but it's odd hmrc calls the £200k as net income.

dainerol

Is there a way to reduce adjusted income? E.g. by doing some charity payments? I'm planning doing some so don't mind doing them now to save myself from paying tax on salary sacrifice.