Tapered Annual Allowance was introduced in HM Revenue and Customs (HMRC) legislation on 6 April 2016.
If you have an NHS Pension and are a high earner, it puts limits on the amount of tax relief you can get on your pension contributions.
The limit is based on the amount of taxable income you have.
It applies to everything you save towards your pension and pension benefits, not just your NHS Pension Scheme benefits.
Your state pension does not count towards your Tapered Annual Allowance.
| 6 April 2016 to 5 April 2020 | 6 April 2020 to 5 April 2023 | 6 April 2023 | |
|---|---|---|---|
| Taxable income | £110,000 | £200,000 | £200,000 |
| Adjusted income | £150,000 | £240,000 | £260,000 |
If you go over the adjusted income limit, your Annual Allowance may be tapered to a lower amount.
There will be a tapered reduction to the Annual Allowance of £1 for every £2 of adjusted income over the limit.
From 6 April 2020, the minimum Tapered Annual Allowance is £4,000. Before this the minimum Tapered Annual Allowance was £10,000.
Information on how to calculate your adjusted and taxable income can be found in the HMRC Pension Tax Manual.
Read more information on Tapered Annual Allowance on our website.