How much annual allowance can I carry forward?

Ecee76

Hello

A question about carry forward- 

Last tax year I earned £30k and paid all of it into my SIPP
This tax year I will earn £80k. I would like to pay £70k into my pension, which is above this year's annual allowance. 

Can I carry forward £10k unused allowance from last year or is last year's allowance only £30k for me because that's what I earned? The HMRC calculator suggests I can carry forward (or rather, doesn't ask any questions about earnings beyond checking I don't get a tapered allowance).

Thank you.

ColdIron

Last years AA (2022/23) was £40,000

Was that £30,000 gross (£24,000 from you and grossed up to £30,000) or net (£30,000 from you and grossed up to £37,500)? Do/did you have any unused AA from the previous years (and were part of a pension scheme during them)?

dunstonh

Carry forward uses the current year first.  Followed by three years ago, then two years ago, and then last year.   It has to be in that order.

You want to pay £70k into the pension (i.e. £70k gross).    60k is the allowance and you have the earnings.  So, £10k is the amount to carry forward.   So you need to use up 2020/21 unused allowance first.  (then 2021/22 , and finally 2022/23).    

What you earned in previous years doesn't matter.   Its what you contributed in those years relative to the annual allowance (or previous CF) that matters.