In its latest 'Pension schemes newsletter 115' – November 2019, HMRC has warned pension scheme administrators that they must remind their members to declare details of their annual allowance charges in their self-assessment returns.
HMRC says that “We know that scheme members are forgetting to declare details of their annual allowance charge on their Self-Assessment returns”.
Changes to pensions rules, have meant that many higher earners are now liable to a pensions annual allowance charge. HMRC’s increased vigilance on individuals exceeding the tax threshold on pension payments corresponds with the increasing number of savers who are falling foul of the Annual Taper Allowance. According to HMRC in 2017-2018 4,550 pension savers were taxed for breaching the lifetime allowance up from 3,350. This was an increase of 36% from the year before.
Links
2018/19 Self-Assessment Tax Return toolkit (subscribers)
Pensions: tax charge for excess contributions (subscribers)
External links
Pension schemes newsletter 115 – November 2019
Who must pay the pensions annual allowance tax charge
Pension savings - tax charges (Self Assessment helpsheet HS345)