Pension Tax Relief Payments

andykent63

Hi, any help or thoughts would be very much appreciated.

I finished work in Febuary 2021 to look after my father so have been using my savings to live on together with a carers allowance of £270 a month.

I had been paying into the works pension for a few years but not in great amounts.

In October 2021 I opened a personal pension plan with Pension Bee and transferred the small amount that was in the works pension into it.

At the same time I also started paying in monthly sums of money using money from my savings.

In the tax year

2021/2022 I paid in £20700

2022/2023 I paid in £12000

2023/2024 paid in so far £7000

Pension Bee have automatically been collecting tax relief from HMRC and adding it to my contributions

2021/2022 HMRC TOP UP £5175

2022/2023 HMRC TOP UP £3000

2023/2024 HMRC TOP UP £1750

I know this is naive but did not realise that there was a limit to what I could pay into the pension and also the tax relief HMRC contributed.

I have read about the 3 year carry forward rule but am really unsure if I can use this to offset any of the HMRC contributions.

Below are my earnings from the last 3 years before I finished work and the pension payments I made into the works pension.

Tax Year

2018/2019  Total Pay £19559 Pension Payment Total £696

2019/2020  Total Pay £18481 Pension Payment Total £2050

2020/2021  Total Pay £15821 Pension Payment Total £2138

If I have to pay all the HMRC contributions back I am happy to do that. I am really worried that I have broken the law.

I am going to ring Pension Bee and talk with them on how to sort this out, but just wanted some insight from others who have a better understanding of this than me.

Thank you so much to anyone who can advise.

Kind regards, andy.

Albermarle

Carry forward is not relevant in your case.
Since February 2021, you have had no 'relevant earnings' in relation to claiming tax relief on pension contributions ( carers allowance does not count)
In this case the maximum you are allowed to contribute each tax year is £3,600. That is £2,880 from you and £720 tax relief.
So for tax years 21/22 ; 22/23 and so far in 23/24 you have gained significant more tax relief than you are entitled.
Talk to Pension Bee first, they should be able to unwind the 23/24 contributions, but could be more problematic for the previous two years.

xylophone

See https://www.pensionbee.com/pensions-explained/pension-contributions/pension-contribution-limits#:~:text=What happens if you exceed,your tax liability is calculated.

Marcon

andykent63 said:

If I have to pay all the HMRC contributions back I am happy to do that. I am really worried that I have broken the law.

Please don't be. An innocent slip, followed by a willingness to remedy the honest mistake, isn't a big deal, however much it might feel like one.