maxb

I think I can help - I've read the relevant rules far too much trying to deal with my own and my family's tax affairs... The Annual Allowance is a common kind of pensions limit people run into, so it's what a lot of the information that is readily findable is talking about - but it's not the one that might apply to your case. (The Annual Allowance is currently £60000 unless reduced due to much higher income, or having already started to take benefits back out of pensions.) The carry-over of unused allowance from previous years, paying tax charges, needing to do so via Self Assessment, and using on online calculator specific to the Annual Allowance are all details relating to the Annual Allowance, and therefore not relevant to your current situation. You mention you are concerned about paying more into your pension than your annual salary - which is indeed another kind of threshold people paying into a pension need to be aware of - it's often referred to using the words "relevant earnings", as is written in the Finance Act 2004 Section 190 as "The maximum amount of relief to which an individual is entitled ... is ... the amount of the individual’s relevant UK earnings which are chargeable to income tax...". I think you might be within the limit, though! You've said total contributions are only slightly over annual salary, and that some of the contributions were employer contributions... importantly, employer contributions do not qualify for tax relief, and your pension scheme will know this and not have claimed relief on the portion declared by your employer as employer contributions. In the example given, this seems likely to bring the portion of contributions on which relief was paid back down within the annual salary, so everything is good. [Citation for contributions paid by employers not being relievable pension contributions: https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm044100#relievable] Regarding your final question, about relief arriving in your pension later than the original contribution to which it relates - no, the relief is dealt with as part of the same tax year as the original contribution, even when it takes longer to be retrieved from HMRC. That came up recently in these forums at https://community.hmrc.gov.uk/customerforums/sa/bdde8465-95f4-ef11-a4de-002248c7d37d and other threads.

HMRC Admin 5's response that Gift Aid donations cannot be carried back for the purposes of Adjusted Net Income appears to be in error, as https://www.legislation.gov.uk/ukpga/2007/3/section/58 states: "For the purposes of Chapters 2 and 3, an individual's adjusted net income for a tax year is calculated as follows. ... If in the tax year the individual makes, or is treated under section 426 as making, a gift that is a qualifying donation for the purposes of Chapter 2 of Part 8 (gift aid) deduct the grossed up amount of the gift." wherein the section 426 referred to is "Election by donor: gift treated as made in previous tax year", and the use of adjusted net income in the tapered personal allowance is dealt with in the chapter 2 referred to. The restriction "For the purposes of Chapters 2 and 3, an individual's adjusted net income for a tax year is calculated as follows" does introduce ambiguity on whether adjusted net income can mean something else outside those limits, however for the case of HICBC, this is specifically clarified at https://www.legislation.gov.uk/ukpga/2003/1/section/681H

I'm fairly sure the date that matters is the always the date of the original contribution reached the scheme, as Self Assessment doesn't seem capable to representing a net contribution in one year and its relief in the following year, and nothing seems to be written anywhere about that kind of split treatment being a thing. However since I've never been able to find anything online that outright confirmed this, when this mattered to me, I chose to ask the SIPP provider to confirm the tax treatment of the particular payment, so I had something in writing - which they did, attributing the relief to the tax year of the original contribution.

Why not use the real amounts paid? Unfortunately I can only offer the rather unsatisfying answer that the government wrote the laws such that pensions are treated differently. I'm not sure if the underlying history that led to the laws being written in that way. In arriving at the figure of 54 days, it looks like you've measured the time from your birthday to the last payment day. You used the word accrued in describing it, but I don't think that's correct. The state pension accrues weekly - even though it only gets paid out 4-weekly. I count 8 complete Monday to Sunday weeks between your 2021 birthday and the end of the tax year... 8 weeks is 56 days. Add on the 2 days from the initial partial week makes 58 days... It almost seems like HMRC forgot to tax you on those 2 days' pension. In following tax years, you've said they followed the 1 week old rate, rest of year new rate pattern, which also is as expected for taxing full weeks as they complete and accrue.

If your pension is deducted from your wages **before** tax, you have no further relief to claim, as you've already fully benefited from not being taxed at all on the portion of your earnings contributed to your pension. This is because not only was tax not deducted during payroll, but additionally the amount of the contributions was removed from being included in the total pay figure on your P60 certificate. (Check that number to confirm it is what you would expect.) This means there was more space left within your basic rate band, allowing more of your self-employment income to be taxed at basic rate that would be the case without the pension contributions, automatically granting you the equivalent to the additional relief due for someone making pension contributions as a higher rate taxpayer.

(I'm replying whilst the previous post is still in moderation and hidden - I can't currently see it.) The annual allowance applies to the total of all amounts going into your pension, i.e.: 1) Anything you pay in 2) Any basic rate relief that is claimed by your pension provider and added to your pension 3) Anything anyone else pays in (e.g. your employer) Of the options you listed, this is closest to b), but employer contributions use up the allowance too. Higher rate relief claimed on the tax return does not affect the annual allowance, because it is not paid into the pension, instead being returned to the taxpayer's general income.

The problem with that method is that it assumes the tax code notice is infallibly correct... which, granted, it does seem to have been in this instance, but part of the purpose of Self Assessment is to correct for mistakes or out of date info in the PAYE process. As an alternative, I'd suggest finding your previous year's weekly rate, and your current year's weekly rate, and following the guidance in the "How to fill in your tax return" (SA150 Notes) from https://www.gov.uk/government/publications/self-assessment-tax-return-sa100 That way, you're working from the most accurate data available to you, and using a method HMRC have declared in writing to be correct. And yes, it does come to £10581.50 for a 2023/24 New State Pension.

Given the SA150 Notes tell us to use 1 week old / 51 weeks new, regardless of the day of the week 6th April falls on (for people who reached State Pension age on or after 6th April 2010), the only logic I can think of fitting with this is that, on a Monday 6th April: * First, entitlement accrues for the week that has just completed (Monday March 30th through Sunday April 5th) at the old rate * Second, the rate switches to the new rate for week just starting to accrue Frustratingly, I can't find any sources to verify, so this is just conjecture to fit the observed advice. But, this hints at another can of worms... in some years there will be not 52 Mondays, but 53. If I'm understanding this right, those years would need to be calculated as 1 week old / 52 weeks new. The last such year was 2020/21 ... I went back to look at the SA150 equivalent from that year, but it didn't feature all the details present on the current ones, so was inconclusive.

@Xiao Chen Somewhat surprisingly to me too, the Self Assessment form does not ask you to explicitly claim the carry forward of unused Annual Allowance. It just has the one question: "Amount saved towards your pension, in the period covered by this tax return, in excess of the Annual Allowance" It is left up to you to figure out what your Annual Allowance is, including carry forward, and if you went over it, by how much - and just declare the amount saved in excess, if any. Personally, I'd still put as much information as I could into the Additional Information box for the whole return about how I worked out the figure, just so I had the information already there in the return if I was ever challenged about it - but I'm not aware of it being required to do so. I think you could just leave above-mentioned question blank, if you know you have enough carry forward Annual Allowance to cover all your pensions savings. In other words - you don't claim the carry forward - you just don't declare the liability to the extra charge, if you have no liability after considering carry forward.

Moreover, there is *no* circumstance in which a PAYE tax code adjustment allows for income to be then omitted from Self Assessment. Self Assessment always looks back over everything that happened in the tax year - PAYE only allows for tax to be paid earlier, it still remains part of the overall year's calculation.