Annual allowance - tax charge

From April 2014 the annual allowance is reducing from £50,000 to £40,000. The annual allowance is the amount by which the value of a member's tax approved benefits can increase in any year without incurring tax.


To help employers when liaising with scheme members, please find attached a ready reckoner for calculating pension tax charges.
 
The ready reckoner requires some basic active member data - like salary, service, Additional Voluntary Contributions (AVCs) paid - inputted in cells (highlighted in yellow).

It automatically calculates an estimate of the level of pension savings and tax charges for members, and any carry forward of unused annual allowance from the previous three years.

The carry forward can make quite a difference to the outcome. The non-highlighted cells are locked to avoid corruption or altering of the coding that's been developed.
 
Please note the ready reckoner provides an estimate for illustration purposes only, although it is relatively sophisticated in its output. Pension benefits and tax calculations are complex. We claim no liability for damages arising from any decision taken based on the figures quoted.
 
The ready reckoner is password protected to ensure only registered employers in the Derbyshire fund have access. If you have trouble with the password please contact the pensions technical team at pensionstech@derbyshire.gov.uk 

We have also provided a useful guide to the changes on the taxation of pension benefits in the related documents section.

Related documents

The following document is in Portable Document Format (PDF). You can download software to view PDF documents for free from the Adobe website (opens in a new window)

The following document is in Excel format. You can download software to view Excel documents for free from the Excel viewer page (opens in a new window) of the Microsoft website.