Confused about pension contribution tax year (paid 31 Mar, credited 10 Apr)

twister_teddy

Hi all, quick question about HMRC’s pension Salary sacrifise rules.

I’m a PAYE employee paying into a SIPP via my employer salary sacrifice. My March 2025 salary was paid on 31 March, and the pension contribution for that month was deducted then. The employer says they sent the payment to the pension provider on 31 March, but it only showed up in my SIPP account on 10 April 2025.

For annual pension allowance purposes, does this count as a 2024–25 or 2025–26 contribution? 

I’ve read conflicting info about whether it’s the deduction date or the date the provider actually receives the funds that matters. 

I am presuming there is either delay between;

a) Employer sending the funds and the SIPP Pensions provider receiving it OR 

b) Pensions provider receiving funds and then take few days crediting to my SIPP account 

Anyone been through this with HMRC or their provider before?

Thanks!

Cobbler_tone

That's a great question and surprised I haven't seen it asked before. Ties in with the delays in them appearing question. 
I have no idea but think it should really be the date you get paid (i.e. you have sacrificed it), however, wouldn't be at all surprised if it is when it arrives in your pension as a contribution. 

ClashCityRocker1

The effect of the pension contribution was to reduce your taxable pay in March therefore it will reduce your income tax bill for 2024/2025.

Your P60 for 24/25 will not include the pension contribution as taxable pay.

I think.

Cobbler_tone

ClashCityRocker1 said:

The effect of the pension contribution was to reduce your taxable pay in March therefore it will reduce your income tax bill for 2024/2025.

Your P60 for 24/25 will not include the pension contribution as taxable pay.

I think.

That's right but the question was which period the contribution drops into for annual allowance purposes.

twister_teddy

ClashCityRocker1 said:

Your P60 for 24/25 will not include the pension contribution as taxable pay.

I've yet to check my P60 and if it doesn't show then I still have the question about my exact contributions in each tax year of 2024-25 and 2025-26, so I don't accidently over subscribe and calculate my allowances correctly. 

Marcon

Nothing is going to show on your P60 about pension contributions. It will show your (post-sacrifice) salary.

This question crops up regularly, so you aren't alone in being bemused. Have a look at this thread from last month - the link given by @Dazed_and_C0nfused on 26 September is especially useful: https://forums.moneysavingexpert.com/discussion/comment/81662065#Comment_81662065?utm_source=community-search&utm_medium=organic-search&utm_term=pension+contribution+in+march+reaches+pension+in+april+which+tax+year

ClashCityRocker1

Yes sorry that is a different question and may well have a different answer! 

ClashCityRocker1

I think it is a DB scheme it will depend on the scheme! If it is aDC scheme I would guess it would count when it was credited to the scheme. 

But that just seems logical to me which doesn't mean it will be true.

DRS1

Interesting that the thread ends when that OP says the contributions are via salary sacrifice.  Are the rules about employer contributions the same as employee contributions?  So does the OP have to find out if the employer is sending a cheque or using a debit card or faster payments?

ClashCityRocker1

Member contribution made via employer deduction through payroll

The employer effectively acts as collection agent for the transmission of employee contributions taken from their pay and passed on to the relevant pension scheme administrator.

The date of payment in the case of a contribution made under the net pay arrangements is the date of deduction from the employee’s pay.

The date of payment for a contribution made under Relief at Source, for example to a group or other personal pension scheme, is the same as a payment the member makes direct. For example the date authorised to draw money by direct debit from the employer’s bank account or the date the employer’s cheque is received.

Albermarle

DRS1 said:

Interesting that the thread ends when that OP says the contributions are via salary sacrifice.  Are the rules about employer contributions the same as employee contributions?  So does the OP have to find out if the employer is sending a cheque or using a debit card or faster payments?

Whether it is an employee or employer payment, a deduction on March 31st arriving at the provider on April 10th is actually quite quick by some standards anyway.
I think legally the delay can be up to three weeks.
I do not think it is the method ( cheque, debit card etc) that is usually the issue, just admin delays in the employer HR/payroll dept.