← Learn/Pensions · Annual allowance
Part of the Pension annual allowance guide →
Has my client breached the annual allowance? A decision aid
Four questions that tell you which annual-allowance rules are in point — the standard £60,000, the high-earner taper, the MPAA and carry forward — and route you to the calculator for the figure.
Based on HMRC’s Pensions Tax Manual (PTM055100, PTM056500, PTM057100) and Finance Act 2004.
4 min read · Last reviewed
Whether a pension annual allowance charge is in point comes down to four things: how much went in this year, whether the high-earner taper applies, whether the member has triggered the money purchase annual allowance, and whether there is carry forward to absorb an excess. Answer the four questions below and the aid shows which rules engage — then confirm the figure on the calculator.
Answer the four questions above to see which annual-allowance rules are in point.
What each answer engages
The standard allowance. Most members have a £60,000 annual allowance (PTM055100). Input below it, with no taper and no MPAA, means a charge is unlikely. Input at or above it means a charge depends on the taper and on carry forward.
The taper. If adjusted income exceeds £260,000 (and threshold income exceeds £200,000), the allowance falls by £1 for every £2, to a £10,000 floor (PTM057100) — so a charge can arise even on input under £60,000. The two income tests are unpicked in threshold income vs adjusted income.
The MPAA. Flexibly accessing a DC pot (drawdown income or a UFPLS) caps money-purchase input at £10,000, and carry forward can never lift that cap (PTM056500) — see does a UFPLS trigger the MPAA? Carry forward. Unused allowance from the previous three years is added before the excess is worked out (PTM055100), but never against the MPAA — the detail is in carry-forward of unused annual allowance.
The aid states which rules are in point; it does not work the number. For the exact position — the taper, the MPAA and carry forward computed together with the chargeable excess and the charge — run the pension annual allowance calculator, and for how the charge itself is then worked, see how the annual allowance charge is calculated.
PTM055100 (standard allowance & carry forward) · PTM057100 (taper) · PTM056500 (MPAA)
Common questions
- How do I know if my client has an annual allowance charge?
- Compare the year’s pension input against the allowance available — the £60,000 standard allowance (reduced by the taper for high earners, or replaced by the £10,000 MPAA after flexible access), plus any carry forward. Input above the available allowance is the chargeable excess. The decision aid above shows which rules apply.
- Can a charge arise on input under £60,000?
- Yes. The taper can cut a high earner’s allowance to as little as £10,000, and after an MPAA trigger DC input over £10,000 is chargeable regardless of carry forward. So input well under £60,000 can still produce a charge.
- Does this tool calculate the charge?
- No — it is a triage that tells you which rules are in point and routes you to the pension annual allowance calculator, which works the exact figure with the taper, the MPAA and carry forward. It states rules; it does not advise.
Sources & grounding
- The triage is a rule-router, not a calculation: each answer states which HMRC rule engages and links /calculators/annual-allowance for the figure. No tax is computed in the UI (CLAUDE.md §1) and no recommendation is made.
- Rules + thresholds: standard annual allowance £60,000 (PTM055100); tapered annual allowance — £200,000 threshold-income gate / £260,000 adjusted-income taper start / £10,000 floor (PTM057100); money purchase annual allowance £10,000, carry-forward never set against it (PTM056500); carry forward of the three prior years’ unused allowance (PTM055100). Values held in the versioned config the calculators render.
- The triage logic (`triage()` in AnnualAllowanceTriage.tsx) is a pure function of the four answers, pinned branch-by-branch in aa-triage.test.ts.
For planning and illustration purposes only. Verify all inputs against source documents. This explainer does not constitute financial or tax advice.