HMRC issues reminder on annual allowance charges
HMRC has issued a reminder about annual allowance charges for the 2014/15 tax year, together with some useful links to HMRC information and tools.
From 6 April 2014 the annual allowance for tax relief on pension savings in a registered pension scheme was reduced to £40,000.
Pension scheme administrators will soon be issuing annual allowance pension statements for the 2014 to 2015 tax year to all individuals contributing more than £40,000 to their pension scheme.
An annual allowance charge will be due where an individual exceeds the £40,000 annual allowance for the 2014 to 2015 tax year and does not have sufficient unused annual allowance to carry forward from previous tax years. Further HMRC information on carry forward can be found on GOV.UK.
It is important that where individuals have exceeded the annual allowance for the 2014 to 2015 tax year across all of their pension schemes, it is declared on their Self Assessment Tax Returns. There will also be a tax charge. Information on paying tax charges can be found on GOV.UK.
Scheme administrators only need to provide individuals with a pension savings statement if they have contributed above the annual allowance in their scheme.
If an individual's total contributions exceed the £40,000 annual allowance across all schemes, they may not get a pension savings statement, but may still have exceeded the annual allowance.
HMRC provides online tools and calculators to help check whether individuals need to declare and pay an annual allowance tax charge, even if they haven't received a pension statement from their pension scheme administrator.