The Pension Annual Allowance tax charge depends on the individual’s marginal rate of tax. The deadline to pay HMRC is 31st July 2019 for the 2018/19 tax year. Read on to learn how the rates are calculated.
Where their income exceeds £150,000 it would be at 45%. Thus if the pension input for 2018/19 Was £40,000 and the limit is tapered to £10,000 the excess of £30,000 would incur a £13,500 tax bill on top of their normal tax liability.
You can ask your pension provider to pay HMRC out of your pension fund if you’ve gone over your annual allowance and the additional tax is more than £2,000.
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