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Help with Salary Sacrifice! Carrying over my Annual Allowance from previous years
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C4rlos12345678
Posts: 26 Forumite

Good Afternoon Forumites,
I currently Salary sacrifice into a SIPP.
I just need some clarification (and if needed to plan ahead) when carrying over the unused Annual Allowance (currently at £60000) into the new tax year.
To explain with some simple numbers:
In Year 2023/24, out of my initial £100,000 salary, I salary sacrificed £40.000 , making my P60 amount £60,000
So in Year 2024/25, still on £100,000, can I sacrifice £60,000 + unused £20,000 from the previous year? (assuming the £20,000 left is above the minimum wage?)
And if so, how does HMRC (and one's employer) determine this annual 'overpayment' is indeed carried over from the previous year? Do I need to fill any forms at any point?
Many thanks in advance
I currently Salary sacrifice into a SIPP.
I just need some clarification (and if needed to plan ahead) when carrying over the unused Annual Allowance (currently at £60000) into the new tax year.
To explain with some simple numbers:
In Year 2023/24, out of my initial £100,000 salary, I salary sacrificed £40.000 , making my P60 amount £60,000
So in Year 2024/25, still on £100,000, can I sacrifice £60,000 + unused £20,000 from the previous year? (assuming the £20,000 left is above the minimum wage?)
And if so, how does HMRC (and one's employer) determine this annual 'overpayment' is indeed carried over from the previous year? Do I need to fill any forms at any point?
Many thanks in advance
0
Comments
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Can you clarify if there are any employer payments into the pension, as they count towards the annual allowance as well?0
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Is your employer also making contributions to your pension, as if so those will also count towards the £60k.1
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C4rlos12345678 said:Good Afternoon Forumites,
I currently Salary sacrifice into a SIPP.
I just need some clarification (and if needed to plan ahead) when carrying over the unused Annual Allowance (currently at £60000) into the new tax year.
To explain with some simple numbers:
In Year 2023/24, out of my initial £100,000 salary, I salary sacrificed £40.000 , making my P60 amount £60,000
So in Year 2024/25, still on £100,000, can I sacrifice £60,000 + unused £20,000 from the previous year? (assuming the £20,000 left is above the minimum wage?)
And if so, how does HMRC (and one's employer) determine this annual 'overpayment' is indeed carried over from the previous year? Do I need to fill any forms at any point?
Many thanks in advance- In TY 2024-25, you have to use all of that years AA first before carry-forward can be considered.
- Carry forward then starts from the oldest available, which is a maximum of three years, so 2021-22
- Then any available from 2022-23
- Then any available from 2023-24
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Grumpy_chap THanks for your reply. And apologies if not clear. I only opened my SIPP in the 2023/24 tax year so am I correct in assuming the 2023/24 year is the oldest available (even though I have a NEST account for auto-enrolment since 2020?)
So to re-phrase, can I use the whole of £60,000 (2024/25) and then start using the £20,000 (2023/24)? And if so, are there any forms to fill to inform HMRC / course of action to take?0 -
C4rlos12345678 said:Grumpy_chap Apologies if not clear. I only opened my SIPP in the 2023/24 tax year so I am correct in assuming the 2023/24 year is the oldest available? Even though I have a NEST account for auto-enrolment since 2020?
Whether you want to make the bumper payment to your SIPP, NEST or a completely new scheme doesn't matter.Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!1 -
Albermarle
Yorkshire_Dangermouse
Thanks for your replies.
Yes my employer makes the auto-enrolment contributions and so do I (NEST).
I am aware these both count towards the AA (including the automatic 20% tax relief - relief at source amounts) as does the portion of the saved 3.5% erNI passed to my SIPP provider by my employer (Salary Sacrifice amounts).
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C4rlos12345678 said:Grumpy_chap THanks for your reply. And apologies if not clear. I only opened my SIPP in the 2023/24 tax year so am I correct in assuming the 2023/24 year is the oldest available (even though I have a NEST account for auto-enrolment since 2020?)
So to re-phrase, can I use the whole of £60,000 (2024/25) and then start using the £20,000 (2023/24)? And if so, are there any forms to fill to inform HMRC / course of action to take?
AIUI - but really hope someone will positively confirm - you are a member of a pension scheme if you have employer pension. That seems to be what is indicated here:
https://www.moneyhelper.org.uk/en/pensions-and-retirement/tax-and-pensions/carry-forward
1 -
Grumpy_chap said:C4rlos12345678 said:Grumpy_chap THanks for your reply. And apologies if not clear. I only opened my SIPP in the 2023/24 tax year so am I correct in assuming the 2023/24 year is the oldest available (even though I have a NEST account for auto-enrolment since 2020?)
So to re-phrase, can I use the whole of £60,000 (2024/25) and then start using the £20,000 (2023/24)? And if so, are there any forms to fill to inform HMRC / course of action to take?
AIUI - but really hope someone will positively confirm - you are a member of a pension scheme if you have employer pension. That seems to be what is indicated here:
https://www.moneyhelper.org.uk/en/pensions-and-retirement/tax-and-pensions/carry-forwardMarcon said:C4rlos12345678 said:Grumpy_chap Apologies if not clear. I only opened my SIPP in the 2023/24 tax year so I am correct in assuming the 2023/24 year is the oldest available? Even though I have a NEST account for auto-enrolment since 2020?Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!1 -
Marcon
Grumpy_chap
Many thanks - Much appreciated. Great that NEST counts.
Last questions please. Do I have to inform anyone about going over (or planning to go over) i.e. HMRC and/or Employer?
And how is using past allowances reconciled ?
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Just came across this - a useful link to an HMRC Calculator on how much AA you can carry forward:
https://www.gov.uk/guidance/check-if-you-have-unused-annual-allowances-on-your-pension-savings
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