What if you put too much in a pension one year?

[billyg]

Hi, I think I have put over what I earned in the year in a pension as I didn't realise that income from property didn't count.

The pension company said they would refund the over payment once I have submitted my tax return.

The trouble is in order to submit my tax return I need to enter how much I paid into the pension.

And presumably get a penalty?

Any advice would be greatly appreciated

[someone]

Don't know for certain but I'd enter that the amount paid into the pension is the amount after refund and add a white space note saying that the difference will be refunded.

AIUI, there are very strict rules on when a pension company can refund contributions - mostly they cannot but this is one case where they can - but it would be illegal/unlawful for them to refund more than your allowable income that makes up your maximum contribution which is probably why they're not doing it until after you submit your tax return so they can see that the refund lines up with this.

[billyg]

Thanks so much for your help

[someone]

Gaah, that was a terribly worded comment of mine!

I'd enter the amount after the refund into the tax return.

I'd add a white space note saying that I'd paid more but the pension company are refunding the difference due to the contributing exceeding the relevant income.

[Subir15]

Hi,
If you put too much into a pension in one year, you may exceed the annual allowance set by the government. Contributions above this limit usually lose tax relief, and you could face an additional tax charge. However, you might be able to use carry forward, which lets you use unused allowances from the past three years to cover the excess. If that’s not possible, the surplus may need to be withdrawn or taxed, so careful planning is essential.