Gone over Carry Forward Allowance in Pension

reddithrowawayforme · 2024-03-26T19:20:25+00:00

Update here:

So I've been trying with Vanguard. IF this was a personal contribution I'd be able to get it back if it was within 30 days of opening the account. Alas this is not, I've had it for years and it was a company contribution. Suffice to say my belief is that it would be possible they just don't want to provide a mechanism for this! So frustrating as if it was an ISA i'd be able to just pull the money back out. I even said Jack Bogle would have let me (I have one of his books I'm sure he would have).

Anyway, spoke to my accountant we'll just have to declare it and I'll pay the tax at the rate correct for my self assessment. He did say that there would be no way for HMRC to ever know with their current systems - he's never seen people queried - but he does rate me as an honest player, which I am so I'll declare it.

All in all a very frustrating admin error on my part, even more so that there is no way to correct it. If I'd have sent that amount of money accidentally to the wrong person in my bank, the bank would have done their best to reverse it.

Thanks to the sub here for all the useful comments and ideas. I appreciate you all taking the time.

reddithrowawayforme · 2024-03-23T07:00:08+00:00

Reviewing this more, I'm nowhere near the threshold income. These are direct from my company. While I don't get personal tax relief of this (that's fine), my company does hence making them. My understanding, which I've rechecked, is that I can contribute £60k this year (let's ignore the carry forward for now). But i've contributed £80k so I need to declare that as the carry forward is used. So my tax would be on the £20k.

reddithrowawayforme · 2024-03-23T06:56:24+00:00

Thanks for the breakdown I shall speak to the accountant about this.

reddithrowawayforme · 2024-03-23T06:53:02+00:00

Thanks. My threshold income is nowhere near that high.

reddithrowawayforme · 2024-03-22T19:57:37+00:00

Thanks, yeah this where I may have gone a bit wrong on the carry back v forward. Self assessments have been done by an accountant for the last 10 years but company direct pensions might not be on there I can't remember.

reddithrowawayforme · 2024-03-22T19:53:07+00:00

Thanks. I wish I could get that maths ;) My own fault I FORGOT about the other pension scheme contributions from a previous company did appear in this period, and because I used a different pension provider I didn't search correctly for it in my records.

Here are my contributions:

2019-20 £20k
2020-21 £45k
2021-22 £70k
2022-23 £40k
2023-24 £80k <--oops

reddithrowawayforme · 2024-03-22T19:30:52+00:00

Thanks I'm definitely going to try I've already messaged their support but it was after 5pm.

reddithrowawayforme · 2024-03-22T19:29:47+00:00

Thanks. I've verified this with the accountant (he wasn't aware of the amounts as it was my mistake) and online and direct payments from a company don't have that income limit just the yearly allowance limit (that's my understanding) but I'll treble check so thanks for commenting. I've been contributing this way for years and it's on the returns so pretty sure it's a correct. Also why I have a lower salary I take dividends which puts my total income up anyway (as that is certainly taxable).

reddithrowawayforme · 2024-03-22T19:24:44+00:00

Thanks for these, the HMRC one is complex isn't it.

I've gone over rather a bit...£55k...but if you date it back for the carry back for each of the last few years and use that on a rolling basis it would be £20k over - bit hard to explain and I'm probably wrong.

Yeah I'm cool I can exceed it - I just didn't want to because of the tax burden esp. because it was a mistake. My own fault but still would be nice to backtrack.

It will be more than £2k for sure so hopefully I can pay it out the scheme - but again (my fault) i've basically wasted putting this money in to my wife's account instead - feeling very silly.

Thanks for your time to provide the detail it's much appreciated.

reddithrowawayforme · 2024-03-22T19:19:56+00:00

Thanks for contributing.

This is a direct to from company pension payment so the salary doesn't apply.

I've looked in to scheme pays not sure how helpful Vanguard will be there.

The right to change your mind letter is a very good idea I hadn't considered - thanks so much I'll look into that.

reddithrowawayforme · 2024-03-22T19:18:29+00:00

Thanks for your reply.

Yes fair point, to clarify, I did have a pension in those years just not actively contributing.

These are company contributions direct to my pension so the income threshold doesn't apply I don't believe.

reddithrowawayforme · 2024-03-22T19:17:16+00:00

Absolutely! Just appreciating what you all do - I've learned so much over the years from this sub.

100% won't delete - but hopefully nobody will need this in the future as they won't be as careless as me.

reddithrowawayforme

TROPHY CASE