The MPAA in summary.
Where taxpayers have accessed a pension, the amount they can pay into a pension and still get tax relief is the Money Purchase Annual Allowance (or MPAA) which for the tax year 2019-20 is £4,000. Where it’s exceeded it should be entered on the SA return and appropriate tax paid. The MPAA runs from:
- the day after the pension was flexibly accessed to the end of the tax year, or
- the whole of the tax year if flexibly accessed in a previous tax year.
Unused allowances from previous tax years can’t be used to reduce the amounts paid above the MPAA. Where the MPAA has been exceeded, calculate:
- The alternative chargeable amount.
- The default chargeable amount.
Article from ACCA In Practice