Unused SIPP allowance from 2022/2023 tax year

DRS1

https://forums.moneysavingexpert.com/discussion/comment/81936913#Comment_81936913

Interesting. Not possible = but isn't the company legally obliged to contribute to a pension scheme for you? Maybe you have opted out.

username12345678

https://forums.moneysavingexpert.com/discussion/comment/81936916#Comment_81936916

I'm not self-employed, it's just the way my pay is structured it doesn't include pension contributions from my employer.

I've looked at the tapering…and without wanting to open a different can of worms…my understanding is the personal pension contributions take me back under the 'Threshold Income'.

I did originally think that I had to alert HMRC that I was making contributions above the AA for 25/26 and it seemed that updating the 22/23 contributions was a possibility. I realise now it isn't and the system automatically captures it.

Isthisforreal99

https://forums.moneysavingexpert.com/discussion/comment/81936902#Comment_81936902

Surprised you don't know what net relevant earnings are.

DRS1

https://forums.moneysavingexpert.com/discussion/comment/81936924#Comment_81936924

Yes you only need to report going over the AA if you have gone over the AA for 25/6 PLUS any AA available to be carried forward from earlier years. So going over £60k doesn't need a report if you have say £30k to carry forward and you have kept the gross contribution under £90k.

And now is the time to use up the carry forward from 22/3 because next year that won't be available any longer.

Marcon

https://forums.moneysavingexpert.com/discussion/comment/81936928#Comment_81936928

Rest assured that I do - but to a layman reading your answer, they'll think you mean gross salary minus tax.

Secret2ndAccount

I wondered how this thread could possibly have got to 21 posts, so I clicked on it. It turns out almost none of the posts are answers to the OP's question.

You have £60k AA from this year, plus, say £20k from 3 years ago. So the most you can contribute to a pension this year without penalty is £80k. That's from ALL sources, you + taxman + employer. So you would pay in a total of £64k which would then have 16k added by your pension provider from HMRC.

You have plenty of salary to permit that contribution. You will receive further tax relief because you are a higher rate taxpayer. I'm not sure how it will work - could be an adjustment to your tax code, or a refund. You can leave it to HMRC to sort it, or call them up or visit your online account and try to speed up the process. That money comes to you, it doesn't go into your pension.

You don't need to inform HMRC that you are using carry forward of the annual allowance, but do keep sufficient records to show your position if asked.

Adjust your contributions according to the actual amount of carry forward you have.

Unfortunately, it doesn't look like you will get your adjusted net income down enough to stay out of the highest rate tax bands. If you contribute any more to your pension, breaching the AA, you will pay a penalty at your highest rate of tax so it isn't worth it.

artyboy

I may have got a bit lost here so ISTBC… but from what I could make out, the OPs pension contributions for this year may not have have been a part of the "just over" £200k earnings. If it were on top, then potentially AA tapering rules may come into play, even if only to a relatively small extent.

Maybe something extra to factor into the calculations?

username12345678

I may not have been clear to be fair.

The earnings for the year (£207k) were before any contributions were used for Threshold and Adjusted Income levels.

I am above the initial Threshold £200k but below it again once my gross SIPP contributions are included.

I am below the Adjusted £260k initially but above it when my gross contributions are included.

My understanding is that because my gross contributions take me back under the Threshold trigger there is no tapering.

As ever I am very happy to be educated otherwise to avoid mistakes.

DRS1

Based on this I think you are right

Tapered annual allowance explained 2025/26 | MoneyHelper

No need to worry if your threshold income is below £200k and you deduct your personal pension contributions to calculate the threshold income.

Just a thought - the tax year is passing and I don't know when your SIPP will stop accepting contributions (Easter holidays) so you may want to get a move on.