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Tax consultant reqd - re Ann Allow Tax charge

Annual allowance tax charge

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I have a client with potential charge for excess pension provision.

Years affected 2016-17 - 2019-20.

Assisitance required in calculating the adjusted income figure

 

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By Wanderer
28th Jun 2021 17:05

Once you have accumulated the information the actual calculations aren't that difficult.

You can also run them through HMRC's online calculator which will highlight if their figures differ from yours.

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Replying to Wanderer:
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By The Dullard
28th Jun 2021 18:27

HMRC's calculator only calculates the utilisation of the annual allowance. The adjusted income figure is an input to it.

In defined benefit situations, the calculation of adjusted income is actually more complicated than many people imagine.

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Replying to The Dullard:
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By Wanderer
28th Jun 2021 19:33

Agreed on both points.

Often though the provider will give the pension input amount which is the normally the area of most difficulty in defined benefit situations .

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Replying to The Dullard:
By pushtheriver
29th Jun 2021 07:35

And that is the core of my problem. Once I am clear about that it is relatively straightforward. But it's a devil of a job to find someone to give (sell) that advice.

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By Matrix
28th Jun 2021 16:55

I think you can purchase software from Absolute for this.

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By The Dullard
28th Jun 2021 18:29

Doctor by any chance?

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Replying to The Dullard:
By pushtheriver
28th Jun 2021 19:17

Yes it is and the calculations are a too complicated to trust software. It's more about what adjustments are required to get to adjusted income. The HMRC notes and NHS notes are far from clear.
I even asked a pensions advisor who told me I didn't have a problem only to change his mind when I disagreed!

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By The Dullard
29th Jun 2021 11:57

The calculation is fully set out in FA 2004, s 228ZA, but in a straightforward case it's Total income gross of personal superannuation contributions, plus the PIA from all schemes (per the statements for the NHS schemes) less personal contributions to all schemes.

You will probably end up with an annual allowance charge for 2018/19 and 2019/20. You've now missed the extended scheme pays deadline for 2018/19, but you can use scheme pays for 2019/20 and make the compensation claim if you act by 31 July.

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Replying to The Dullard:
By pushtheriver
29th Jun 2021 12:23

Thank you so much that's as clear as I've seen it.
As the P60 figure is the gross income less personal pension contributions I assume if I add the PIA from all schemes to the P60 figure and deduct any allowable expenses I get to the correct figure assuming no other income.
Also as scheme pays claims have been made for all periods going back to 2015-16 I believe an amended claim can be made within 4 years. So 2016/17 onwards still in time before 31/7/21?

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Replying to pushtheriver:
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By The Dullard
29th Jun 2021 12:54

I believe you are correct. Don't forget the 2019/20 compensation claim:

https://www.nhsbsa.nhs.uk/nhsei-201920-pensions-annual-allowance-charge-...

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Replying to The Dullard:
By pushtheriver
29th Jun 2021 13:40

Thanks again

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