2023/24 pension contribution above £60k threshold

MortagageWannabe

I am not a native/fluent English speaker, please overlook the grammatical errors.

I will be contributing more than £60k to my pension (via salary sacrifice) for the 2023/2024 tax year.

I would like to utilise the unused annual pension allowance(s) for the previous 3 years.

1. I understand the pension annual allowance is tapered for:

•  ‘threshold income’ over £200,000
• ‘adjusted income’ over £260,000

I expect to earn an approximate gross PAYE income of £206,800 (it’s been an extraordinary year income wise.I don’t expect this to continue in the coming years).
Will my pension annual allowance be ‘tapered’?
I will salary sacrifice all income (including benefit in kind) above £99,000 to retain the “free” 30 hours childcare.

2.How do I calculate the last 3 years pension contributions in order to avoid HMRC taxing the 2023/24 pension contributions above £60k?
Do I need to contact my previous employers to obtain my P60s to determine how much pension I contributed in the previous years?

I have learnt a lesson to keep better financial records in future .

3. I’m I required to inform HMRC of the pension contributions above £60k for the 2023/2024 tax year and the unused previous 3 years allowances to avoid them taxing me through my pension provider/tax code change?

I understand I may need to file a tax assessment as my 2023/24 annual gross income is above £150,000.

I may need to retain an accountant to help with sorting out the above but I would appreciate any assistance/comments.
TIA

Fromdownwest

Have you had a pension in the tax years before 23/24. If not, then you can not utilise carry forward.

MortagageWannabe

@Fromdownwest yes, I have paid into my pension in the last 8/9 years. 

Marcon

Given your income and the levels of cash involved, proper advice (paid for) from a regulated individual is surely the best option - your situation isn't simple, and there is plenty of scope for getting it wrong!

If you've not yet set up a personal tax account, that would be helpful: https://www.gov.uk/personal-tax-account eg previous employers aren't required to send you a replacement P60, but you can get the information for the last five years from your personal tax account.

MortagageWannabe

Marcon said:

Given your income and the levels of cash involved, proper advice (paid for) from a regulated individual is surely the best option - your situation isn't simple, and there is plenty of scope for getting it wrong!

If you've not yet set up a personal tax account, that would be helpful: https://www.gov.uk/personal-tax-account eg previous employers aren't required to send you a replacement P60, but you can get the information for the last five years from your personal tax account.

Thanks  for the advice @m@Marcon.On the back of your advice ,I have found this HMRC resource that states I may need to contact my pension providers for the previous years to determine my unused pension allowance/pension contributions for the past 3 years https://www.gov.uk/guidance/check-if-you-have-unused-annual-allowances-on-your-pension-savings

”Work out your unused annual allowances yourself

You have unused annual allowance if your pension savings were less than your annual allowance for the tax year.

You can ask each of your pension providers for details of your pension savings for each scheme if they’ve not already sent them to you.

If you had unused allowance from the 2015 to 2016 tax year, you need to check if you had a different allowance for that tax year.”

I will then present the above figures to a ( chartered?) accountant to assist with the self assessment for 2023/2024

MortagageWannabe

Update: I requested my pension contribution figures from the various pension management companies and had an accountant calculate unused allowances from last 3 years. The accountant also filed my 23/24 self assessment and obtained a £2,000+ refund from HMRC on my behalf 😁