I am a director and 100% shareholder of a company. I would like to pay a contribution into my pension scheme of up to 100% of my salary. Can I increase my contribution by making use of unused allowances from previous years? 

Arthur Weller replies:  

There are two main limits on contributions made by an individual to a pension scheme that qualify for tax relief. The two limits are independent: (a) The first is that contributions up to the higher of 100% of relevant earnings and £3,600 gross qualify for tax relief; (b) The second is that the 'annual allowance' is the maximum amount of pension savings made by or in respect of an individual in a tax year which can benefit from tax relief. Unused annual allowance can be carried forward three years. But if an individual did not contribute up to 100% of their relevant earnings in a previous tax year, this 'shortfall' cannot be carried forward to a future tax year. See HMRC’s Pension Tax manual at PTM44100 (tinyurl.com/hmrc-ptm044100) under the section headed 'annual limits'.