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Following information for the tax year 2016/17:
(2) During the tax year 2016/17, John contributed £18,000 into Surf plc’s HM Revenue and Customs’ registered occupational pension scheme. The company contributed a further £12,000 on his behalf. Both John and Surf plc have made exactly the same contributions for the previous five tax years.
(5) During the tax 2016/17, John made personal pension contributions up to maximum amount of available annual allowances, including any unused amounts brought forward from previous years. These contributions were in addition to the contributions he made to Surf plc’s occupational pension scheme (see note (2)). John has not made any personal pension contributions in previous tax years.
I am able to to calculate the amount of personal pension contributions but I am confused by the figure of the adjusted income used to calculate the tapered annual allowance.
Adjusted income = Net income + employee contributions to occupational pension scheme + employer contributions to personal or occuapational pension scheme.
The net income figure (also the total income and taxable income) is £212,573. However, BPP did not add back the aforementioned pension contributions in Note (2) to calculate the reduction in the annual allowance.
Even if we add them back, the final answer remains the same. My doubt is in the method. Is this a mistake in BPP’s part or am I missing something?
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