What happens if I overpay into my pensions?

What_time_is_it

I may end up overpaying into my pensions for the 25/26 tax year.

Finishing work on July 31st and won’t work again this tax year. Paid about £1,500 more than my taxable earnings into my personal pension so far this year. And I don’t earn anywhere near the £60k required to access previous years’ carry forward.

Do I have to pay back the tax relief? Should be around £300 as I am a 20% tax payer.

I will also have overpaid income tax from my salary this year! So overall HMRC will owe me! 

So how does this all play out? 

Marcon

What_time_is_it said:

I may end up overpaying into my pensions for the 25/26 tax year.

Finishing work on July 31st and won’t work again this tax year. Paid about £1,500 more than my taxable earnings into my personal pension so far this year. And I don’t earn anywhere near the £60k required to access previous years’ carry forward.

Do I have to pay back the tax relief? Should be around £300 as I am a 20% tax payer.

I will also have overpaid income tax from my salary this year! So overall HMRC will owe me! 

So how does this all play out? 

Plenty of good explanations already available eg https://www.ajbell.co.uk/faq/what-happens-if-i-contribute-more-annual-allowance-my-sipp

HMRC will refund overpaid tax in due course, either by adjusting your tax code or you can apply to have the excess refunded.

Marcon

and see https://adviser.royallondon.com/technical-central/pensions/contributions-and-tax-relief/refund-of-contributions/ for a broader view/information.

What_time_is_it

Marcon said:

What_time_is_it said:

I may end up overpaying into my pensions for the 25/26 tax year.

Finishing work on July 31st and won’t work again this tax year. Paid about £1,500 more than my taxable earnings into my personal pension so far this year. And I don’t earn anywhere near the £60k required to access previous years’ carry forward.

Do I have to pay back the tax relief? Should be around £300 as I am a 20% tax payer.

I will also have overpaid income tax from my salary this year! So overall HMRC will owe me! 

So how does this all play out? 

Plenty of good explanations already available eg https://www.ajbell.co.uk/faq/what-happens-if-i-contribute-more-annual-allowance-my-sipp

HMRC will refund overpaid tax in due course, either by adjusting your tax code or you can apply to have the excess refunded.

Thanks! Really appreciate it.

Will HMRC chase me for the extra tax relief I’ve had on my pension overpayments? Or will it kind of “net out” against the extra income tax I have overpaid in the year?

Marcon

What_time_is_it said:

Marcon said:

What_time_is_it said:

I may end up overpaying into my pensions for the 25/26 tax year.

Finishing work on July 31st and won’t work again this tax year. Paid about £1,500 more than my taxable earnings into my personal pension so far this year. And I don’t earn anywhere near the £60k required to access previous years’ carry forward.

Do I have to pay back the tax relief? Should be around £300 as I am a 20% tax payer.

I will also have overpaid income tax from my salary this year! So overall HMRC will owe me! 

So how does this all play out? 

Plenty of good explanations already available eg https://www.ajbell.co.uk/faq/what-happens-if-i-contribute-more-annual-allowance-my-sipp

HMRC will refund overpaid tax in due course, either by adjusting your tax code or you can apply to have the excess refunded.

Thanks! Really appreciate it.

Will HMRC chase me for the extra tax relief I’ve had on my pension overpayments? Or will it kind of “net out” against the extra income tax I have overpaid in the year?

Have a look at the second link I posted (it's rarely a simple yes/no answer in pensions!). It won't 'net out'. 

What_time_is_it

Marcon said:

What_time_is_it said:

Marcon said:

What_time_is_it said:

I may end up overpaying into my pensions for the 25/26 tax year.

Finishing work on July 31st and won’t work again this tax year. Paid about £1,500 more than my taxable earnings into my personal pension so far this year. And I don’t earn anywhere near the £60k required to access previous years’ carry forward.

Do I have to pay back the tax relief? Should be around £300 as I am a 20% tax payer.

I will also have overpaid income tax from my salary this year! So overall HMRC will owe me! 

So how does this all play out? 

Plenty of good explanations already available eg https://www.ajbell.co.uk/faq/what-happens-if-i-contribute-more-annual-allowance-my-sipp

HMRC will refund overpaid tax in due course, either by adjusting your tax code or you can apply to have the excess refunded.

Thanks! Really appreciate it.

Will HMRC chase me for the extra tax relief I’ve had on my pension overpayments? Or will it kind of “net out” against the extra income tax I have overpaid in the year?

Have a look at the second link I posted (it's rarely a simple yes/no answer in pensions!). It won't 'net out'. 

Thanks. I will do that.
You’ve been so helpful this morning. 

hara____

What_time_is_it said:

And I don’t earn anywhere near the £60k required to access previous years’ carry forward.

Are you sure you don't have any unused allowance to carry forward? You don't need to earn £60k to do that, unless I misunderstood the rules the last time I looked into it.

hara____

Oh, I think I get your point now: as you are hitting the earnings limit this year, any unused allowance from earlier years simply isn't relevant.

What_time_is_it

hara____ said:

Oh, I think I get your point now: as you are hitting the earnings limit this year, any unused allowance from earlier years simply isn't relevant.

This year we will both hit the earnings limit (in terms of our salary, although neither of us will earn anywhere near £60k). I think that means that we can’t carry forward any unused allowance from previous years.