The tax bill paid by civil servants who breached the annual allowance increased nearly six-fold in four years, from £0.89m to £6m.

In response to a freedom of information request from union Prospect, the Cabinet Office revealed that the tax charge in 2017/18 (£6m) was paid by 289 Civil Service Pension Scheme members, up from 40 in 2014/15.

Between 2016/17 and 2017/18 there was a 34 per cent tax payment increase, up from the £4.49m paid by 208 civil servants in 2016/17.

The charges were paid through Scheme Pays, which lets members settle tax bills incurred through exceeding the annual allowance of more than £2,000 through their pension scheme without upfront funding.

Commenting on the statistics, Prospect deputy general secretary, Garry Graham, said: “We are concerned that in the Civil Service the annual allowance tax charges incurred by members who have elected for ‘scheme pays’ have ballooned from £1.8m in 2015/16, to £4.5m in 2016/17 and £6m in 2017/18.

“The true extent of the tax charges may be even greater with members paying charges directly to HMRC rather than via scheme pays or from inaction of members over their tax liability.”

The data also revealed that the number of lifetime allowance charges incurred by members increased from 54 in 2016/17 to 80 in 2017/18.

Despite calls from the industry, the government has ruled out scrapping the tapered annual allowance, which is impacting tax charges incurred by public sector workers.

Graham concluded: “Prospect has members across the public sector and it is clear that the tax revenue generated from the annual allowance is coming disproportionately from public sector pension scheme members. This cannot be fair and must be addressed.”

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