How to use the Pension Input Wizard 2018-19?

For wizard information for the 2019-20 tax year, please see: How to use the pension contribution details wizard for 2019-20?

The Wizard has 3 sections:

1. Excess contributions calculation 2018-19: Use to work out the excess contributions before any brought forward allowances can be used.
2. Unused Allowances Brought Forward – Use to work out the brought forward allowances that can be used against the excess contributions
3. 2018-19 Annual Allowance Summary – Displays the excess contributions worked out in section 1,  brought forward allowances being used from section 2 and the final excess that will be subjected to the pension savings tax charge .

Excess contributions calculation 2018-19:

Use total from pension contributions wizard: Clicking on this auto fills the Total Gross Employee Contributions box with the total pension contributions from the Pension Contributions page

Other Pension Contributions made by Employer: Enter any contributions made by your Employer only

Salary Sacrifice and flexible remuneration payments made: Enter the Salary sacrifice or flexible remuneration payments. Please note that these are deemed as Employer contributions.

Total Inputs: Calculation is Total Gross Employee Contributions + Other Pension Contributions made by Employer + Salary Sacrifice and flexible remuneration payments made

Annual Allowance: Annual Allowance for the 2018-19 tax year is £40,000.

Note: Annual Allowance can be tapered if your Adjusted Income is over £150,000 only if your Threshold Income is over £110,000.  The lowest the Annual Allowance can be reduced to is £10,000.

Example: if your Threshold Income is £120,000 and Adjusted Income is £170,000. The Annual Allowance will be £40,000 – ((£170,000- £150,000) / 2) = £30,000

To view the calculation of Adjusted and Threshold Income, click on ‘Show calculation’

Unused Allowances Brought Forward:

Pension Inputs: These amounts are taken from the previous tax year’s tax return if an import is done (provided the wizard was used last year). If an import is not done or wizard not used last year, enter the pension inputs for the respective tax years.

Note: Pension inputs for the respective years should include both Employee and Employer contributions

Allowance used in previous years: This is a new column added in the 2018-19 tax year. The values in this column are taken from the ‘Used against 2017-18’ column from the previous tax year upon Import.

If an import is not done, out of the Allowance for 2015-16 and 2016-17 Post period, if any remaining allowance after Pension inputs, was utilised in the previous tax year 2017-18, enter those amounts respectively.

Note: This column only exists from 2018-19 tax year onwards

Allowance remaining: Shows the allowance remaining that can be used against any excess contributions, if any

Example: The below example demonstrates how to fill the Unused allowances brought forward section.

2017-18 tax year

2018-19 tax year

**In the tax year 2015-16, maximum available allowance was £40,000. Pension inputs were £15,000. The remainder £25,000 allowance got used against the excess contributions in 2017-18. So actual allowance remaining is £40,000 – £15,000 – £25,000 = £0

**In the tax year 2016-17 post 8 July period, maximum available allowance was £40,000. Pension inputs were £1,000. The remainder £35,000 allowance got used against the excess contributions in 2017-18. So the actual allowance remaining is £40,000 – £1,000 – £35,000 = £4,000

2018/19 Annual Allowance Summary:

A) 2018-19 Excess Contributions: Displays the excess contributions after the annual allowance for the tax year is used (From section 1)

B) Brought forward allowances used against 2018-19: Displays the brought forward allowance that is used against the excess (from section 2)

C) Amount saved towards pension in excess of Allowance: Calculation is C = A minus B.
A pension savings tax charge will be calculated on the excess contributions in the tax year, if any.

Note: The annual allowance available in tax year is always utilised first, before any brought forward allowances are used.