TaxCalc automatically offsets your pension contribution allowance against your pension contributions for the current year. If contributions have been paid in excess of your annual pension allowance, you can utilise any unused allowance from the previous three years (starting with the oldest year) to offset against the excess. TaxCalc can assist in keeping track of previously unused pension allowances.

For example:

• If your current year pension contributions are £45,000, and you current year allowance is £60,000 (standard allowance before tapering), you may be able to offset the additional £15,000 against a previous year excess allowance. A tax charge will not apply if the current year allowance plus previous year allowances carried forward can be offset in full against contributions made.
• If your contribution is £30,000, and you are entitled to the full standard allowance of £60,000 you can carry forward the unused £30,000 of your allowance to use in the subsequent three years.

The pension allowance wizard can be found using the following:

SimpleStep mode

1. Go to Tax reliefs and allowances > Pension Contributions & Annual Pension Allowance.
2. Click on the wizard for the top box under the Annual pension allowance heading.
3. Complete the information on screen *

HMRC Forms mode

1. Go to Additional information > Page 4.
2. Click on the wizard for box 10.
3. Complete the entries as required *

* For more information on how to use the pension allowance wizard to keep track of your allowances, please read How to use the Pension Input Wizard?

HMRC guidance: Tax on your private pension contributions. provides more information on tax relief on pension contributions.