TaxCalc automatically offsets your pension contribution allowance against your pension contributions for the current year. If there's an excess, you can bring forward any unused allowance from the previous three years (starting with the oldest year) and offset this against the excess.

For example:

• If your contribution is £75,000, you can offset £40,000 against your allowance for 2019–20, then £35,000 against your allowance from 2016–17. No additional tax will be due because you’re using allowances from previous years. However, if there's an excess after you've used all allowances from the previous three years, a charge will be applied.
• If your contribution is only £30,000, you can carry forward £10,000 of your allowance for 2019–20 to use in future years.

For more information on how to use the TaxCalc software when entering these details, please follow the instructions for How to use the Pension Input Wizard?

Follow the instructions below to enter your pension contributions and allowances into TaxCalc.

SimpleStep mode

1. Go to Tax reliefs and allowances > Annual Pension Allowance.
2. Click on the wizard for the top box.
3. Complete the information relating to the excess contributions.

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 from HMRC on this, please read Tax on your private pension contributions.

PLEASE NOTE: If you're a basic rate taxpayer, this will have no effect on your tax liability. It may begin to have an effect if you're a higher or additional rate taxpayer.

Contributions greater than earnings

If your pension contributions are more than your net relevant earnings in the year, you’ll need to reduce the gross amount being claimed to match this as tax relief is limited to the earnings in the year. If this applies, TaxCalc will display a validation message to prompt you to reduce these entries manually. For further information on how to do this, see the Knowledge Base article Tax relief is not available for pension contributions in excess of £3,600 or net relevant UK earnings.