You do not need to tell HM Revenue & Customs (HMRC) about your pension savings for a tax year if they are:
You will need to tell HMRC if your pension savings are above the total of the annual allowance for the year plus unused amounts brought forward from the three previous tax years, as you will be liable to the annual allowance charge.
If you are liable to an annual allowance tax charge and you normally complete a Self Assessment tax return, then you tell HMRC about your pension savings and liability to the annual allowance charge as part of the return - although people using paper returns will need to ask for the Additional information pages (SA101) to report the information. If you haven't completed a tax return before (or it's been a while since you did), you'll need to complete a registration form to let HMRC know what's changed and to get a tax return - please follow the link below for more information.
Registering for Self Assessment
When you are liable to the annual allowance charge you might be able to ask your pension scheme to pay the charge due. If you are able to do this you will still be liable to the annual allowance charge due but the administrator of your scheme will be jointly liable with you as well.
Being jointly liable with your pension scheme administrator means that the administrator will pay the charge due but you will still need to tell HMRC that you are liable to the charge. This will be done by completing a Self Assessment tax return as described above but you will then state on the return how much tax the administrator will pay for you.
Find out more about how to ask your pension scheme to pay your annual allowance charge (PDF 95K)
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If you do not normally complete a Self Assessment tax return, you need to contact HMRC to register for one (see above). You will need to complete the Additional information pages of the tax return to show the amount by which your total pension input amount exceeds the annual allowance.
The boxes that you need to complete for the annual allowance are in the Pensions savings tax charges section (on the Additional information pages (SA101) in the paper return).
Further information to help you complete this part of the tax return can be found on a helpsheet - HS345 'Pensions - tax charges on any excess over the Lifetime Allowance, Annual Allowance, and on unauthorised payments'.
You should complete your tax return as normal, completing the boxes in the 'Pension savings tax charges' section on the Additional information pages (SA101) in the paper tax return. If you cannot get accurate information from your scheme, you should use an estimate of your pension input amount for the year to work out if your pension input amount is more than the annual allowance. If it is, you should put this excess figure in the appropriate box. You should then make a note in the 'Any other information' part of the tax return to explain that you have used an estimated figure when calculating the amount in excess of the annual allowance and when you expect the final figure to be available. You will also need to tick the box to show that you have used estimated figures on your tax return.
Once you have received the details that you need to work out your annual allowance charge accurately, you can amend your tax return if this is within 12 months of your submission of the original form. Where the estimate is less than the final figure, you will need to pay any additional tax due along with any interest on the late payment of the tax.
Your pension scheme might automatically send you a statement to help you to work out whether you will be liable for an annual allowance charge. From April 2013 you will automatically receive a statement by 6 October if your saving for that scheme is more than the annual allowance for the tax year.
If you have savings in more than one pension scheme and you think that the total of your pension savings across all of these is above the annual allowance (and you do not expect to receive a statement automatically from each scheme), you can ask each of your pension scheme administrators to send you a statement so that you can work out whether your pension saving might have exceeded your available annual allowance. From April 2013 they must provide this information to you within three months of your request or by 6 October, whichever is the later.
You can also ask for a pension input statement for the previous three tax years if you think you might need to use the carry forward facility.
Read more about when you scheme may give you information about your pension saving
From April 2013, your pension scheme must send you a statement if your pension savings for that scheme is above the annual allowance or if you ask for a statement from them.
Where you do not have this information before the Self Assessment filing date then you can use an estimated figure when working out whether you have an annual allowance charge to enable you to complete your tax return on time. You will need to do this for 2011-12 (the first year of the reduced annual allowance) and may need to do so in later years if your pension scheme administrator does not provide you with information in time for you to complete your tax return.
If you have a money purchase arrangement then your pension scheme should send you a statement each year to show contributions that have been added to your pension pot.
If you have a defined benefits arrangement your scheme may already send you an annual statement that gives an estimate of what your benefits will be. If you do not have this then you will be able to estimate your pension input amount by using the figures for your pensionable salary at the beginning and end of the Pension Input Period (PIP), the scheme accrual rate and the number of years that you have been a scheme member. If you do not know what your PIP is or what your scheme accrual rate is then you should contact your pension scheme administrator.
Read more about how to calculate your pension input amount
If your pension input amount is more than the annual allowance, there might still be no annual allowance tax charge. This is because you can carry forward any unused annual allowance from the three tax years before the current tax year (starting from 2011-12).
If your pension input amount is less than the amount of the annual allowance for the current year plus any unused annual allowance that you can carry forward then there will be no annual allowance charge due.
Anna is self-employed and the amount that she saves towards her pension varies depending on how well her business does. So some years she saves more than others. Anna makes pension savings through a money purchase arrangement.
In the tax year 2011-12, Anna puts £60,000 into her pension arrangement. This is more than the £50,000 annual allowance but because the amount that she has saved has varied over the last few years, Anna has some unused annual allowance that she can use.
Anna's pension savings for the last three years have been:
2008-09 £30,000
2009-10 £45,000
2010-11 £30,000
So, Anna has unused annual allowance of £20,000 + £5,000 + £20,000 = £45,000.
This means that Anna's available annual allowance is £95,000 which is more than her pension savings of £60,000 and she does not have to pay an annual allowance charge. Anna can also carry forward unused annual allowance of £25,000 to the next tax year. That is £5,000 from 2009-10, £20,000 from 2010-11 and nil from 2011-12. Although she has some unused allowance left from 2008-09, this cannot be carried forward as it outside the three year period for carry forward.
If your pension input amount is more than the annual allowance plus any unused annual allowance that you have carried forward from previous years then you will be liable to an annual allowance charge.
The amount of the annual allowance tax charge due will depend on how much taxable income you have and the amount of your pension saving that is above the available annual allowance.
To find out the amount of your annual allowance tax charge you add the amount of your pension saving that is liable to the annual allowance charge to the amount of income on which you actually pay tax. You then work out the amount of tax due on that amount at the relevant rates.
Find out more about how the tax change is calculated
You might be able to ask your pension scheme to pay your annual allowance charge (PDF 95K)
You can find details of how to pay your tax charge under Self Assessment on the HMRC website.
If you are liable to an annual allowance tax charge then you will need to complete a tax return to report this.
If you haven't completed a tax return before (or it's been a while since you did), you'll need to complete a Self Assessment registration form before you can get a tax return.
Find out how to pay Self Assessment
This change does not affect the tax position of any pension savings already made before 14 October 2010.
Read more about the transitional rules for the reduced annual allowance in 2011-12
Yes, even if your contributions exceed the annual allowance, you should still claim on your tax return any higher rate relief or additional higher rate relief due. You should also show the amount by which your total pension input amount exceeds the annual allowance.
Yes, you should still claim any tax relief on your pension contributions using your tax return.
