P E R S O NA L TA X
TAX TO PAY ON PENSION SCHEME nrbpqflkW=
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am concerned that I might have tax to pay because I have contributed too much into my pension scheme. I have not received any details from my pension provider. What should I do? ^kptboW
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f you have contributed more than a particular threshold you would be subject to an annual allowance tax charge.
• Your contributions means both your input, your employers and any final salary (defined benefit) top up. • The relevant threshold varies from person to person between £4,000 and £40,000 depending on your specific details • If the annual allowance charge applies this would trigger additional tax which can either be paid directly to HMRC or in some cases via a “scheme pay election” in which the tax is taken directly from your pension scheme. In order to assess and calculate whether you have exceeded the threshold, full details of your contributions would be required. A pension statement is a summary of such details.
annual allowance is tapered down to £10,000 if your income is sufficiently high. In some cases the Money Purchase Annual Allowance of £4,000 applies, which typically happens when you’ve flexibly accessed your pension. The pension scheme provider may not be fully aware of all of your income streams so it would not be possible for them to know whether the tapered allowance applies to you or not. For any of these reasons, it is perfectly possible that your total pension contributions have exceeded the available annual allowance without triggering an automatic issue of a pension input statement from any of the schemes that you are a member of. Despite no pension statement being provided to you automatically, it is entirely reasonable for you to request one from each of your pension scheme administrators. When making your request, you may wish to cite Regulation 14B SI 2006/567 and or the Revenue manual PTM167300. Annual allowance and tapering computations can be complicated, if you’d like help in assessing and declaring the tax charge once you gathered the pension statements, please contact us for a quote. Tax Adept offers a range of services which are specifically designed to help you and your business. You can find further information on tax-
The circumstances under which a pension scheme administrator must issue a statement to a scheme member are quite limited: broadly, where the member’s pension input amount for the tax year exceeds the annual allowance. However, each scheme administrator will only be looking at one particular pension arrangement in isolation. This could be problematic if you contribute to multiple pension schemes. Further, since 2016/17 it is possible that the full
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saving measures in the Resources section of our website: www.taxadept.co.uk. Please contact via telephone on 01444 230777, or visit our website. This article is based on current tax guidance at date of publication and may be subject to change. Any advice shared here is intended to inform rather than advise. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.
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