HMRC have recently indicated that some high earners are failing to report pension growth on tax returns, and could ultimately face huge bills for undeclared pension contributions.
When completing annual tax returns, taxpayers are required to declare if they have put money into a pension above the ‘annual allowance’ (currently £40,000 per year), but as little as £10,000 for those affected by the ‘tapered annual allowance’. This would include growth in their Defined Benefit pension rights as well as cash paid into Defined Contribution pots.
Completing this tax return question requires individuals to understand the system, especially if they are affected by the tapered annual allowance.
If you would like assistance to complete your tax return, please call our Private Client Tax team on 01788 539000.