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Paid more than allowance into pension....
I over paid into my pension last tax year. I did this knowingly as I had taken into account not using full allowance in last 3 years. However, I made am error when calculating the 3 years excess allowance as I missed my personal payments and only looked at employer payments.
So, I have exceeded my limit. The letter from my pension provider says HMRC may be charging up to 45% tax on this excess.
I only got 20% tax relief, so this seems a bit harsh. Is this correct or will they only come for the 20% tax relief they gave me?
Comments
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The key wording in your letter is 'up to'.
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How much did you pay in? If you were doing a calculation on using three years of £60K annual allowance then that suggests your salary before pension contributions might be in the 40% or 45% tax area.
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This sets out how to work out the amount of the charge. Maybe it will make sense to you
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