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  • FIRST POST
    • chris1
    • By chris1 14th Jul 17, 1:22 PM
    • 517Posts
    • 174Thanks
    chris1
    COPE and contracted out question
    • #1
    • 14th Jul 17, 1:22 PM
    COPE and contracted out question 14th Jul 17 at 1:22 PM
    Hope someone can help me get my head around this...

    Briefly:
    Someone reaching State Pension age in this tax year, i.e. under the new scheme, but with 40+ years under old scheme, including some Additional State Pension entitlement. Old scheme amount is larger than new scheme amount, so stated to receive this.

    However two recent years were listed as no contributions (employer’s mistake, now out of business). After sending off the proof the NI record has been amended to show the missing years as OK, BUT the State Pension amount has gone up by just 2p a week, and the COPE amount has gone up by £5.29 a week.

    The problem is that the missing two years were NOT contracted out (although the payslip seems to show that contracted out NI contributions were being paid!??)

    I have tried the online info but to no avail.

    Will it be beneficial to write back to the NI department with this information, or detrimental, or not make any difference?

    Thank you.
Page 1
    • Dazed and confused
    • By Dazed and confused 14th Jul 17, 1:29 PM
    • 1,604 Posts
    • 689 Thanks
    Dazed and confused
    • #2
    • 14th Jul 17, 1:29 PM
    • #2
    • 14th Jul 17, 1:29 PM
    If the only evidence you have shows the contributions as contracted out then what else could they be?

    Do you have P60's which show different contribution type to the payslips?
  • jamesd
    • #3
    • 14th Jul 17, 1:45 PM
    • #3
    • 14th Jul 17, 1:45 PM
    Also try the HMRC contracted out helpline which can tell you for each year whether you were contracted out and which pension scheme was getting any contracted out payments.
    • chris1
    • By chris1 14th Jul 17, 1:51 PM
    • 517 Posts
    • 174 Thanks
    chris1
    • #4
    • 14th Jul 17, 1:51 PM
    • #4
    • 14th Jul 17, 1:51 PM
    If the only evidence you have shows the contributions as contracted out then what else could they be?

    Do you have P60's which show different contribution type to the payslips?
    Originally posted by Dazed and confused
    One of the years has a P60 (NIC Table Letter D). The other is a final month payslip.

    There was no contracted out scheme at that time. A few payments were made to a personal pension in the employee's name.

    The reason for thinking the amounts paid were at the contracted out rate is because the NI amounts were exactly the same figures as the earlier years where there was a contracted out scheme.

    Another point which I have just thought of, there were some earlier years where the contracted out scheme was in place and the contracted-out NI payments were being made, but no payments were being made into the scheme (including the money deducted from salary).

    Would there be any credit (in terms of increased State pension) for this?
  • jamesd
    • #5
    • 14th Jul 17, 2:06 PM
    • #5
    • 14th Jul 17, 2:06 PM
    A key question is whether the scheme received the contracted out rebates from HMRC or not. If it received them then being contracted out is correct. If it didn't then it's employer NI fraud and you have a chance. Ask HMRC. You can then use the HMRC record of no contracted out rebate made to support your claim.
    • chris1
    • By chris1 14th Jul 17, 3:27 PM
    • 517 Posts
    • 174 Thanks
    chris1
    • #6
    • 14th Jul 17, 3:27 PM
    • #6
    • 14th Jul 17, 3:27 PM
    A key question is whether the scheme received the contracted out rebates from HMRC or not. If it received them then being contracted out is correct. If it didn't then it's employer NI fraud and you have a chance. Ask HMRC. You can then use the HMRC record of no contracted out rebate made to support your claim.
    Originally posted by jamesd
    Thank you for replying. The scheme was no longer active in the years we are referring to.

    [History: long-established reputable company, owner retired and sold business, new owner ran up huge debts to HMRC and others, didn't pay anything in to existing contracted out scheme, though deducted contributions from employee salaries. Scheme was made closed.
    Owner set up new 'phoenix' company, employees transferred under TUPE, same salaries and NI, nothing paid into closed contracted out scheme, suspect (as amounts were the same) that NI was being deducted at contracted out rate.]

    So is there any point in going through all this with NI department, seeing as the only aspect of interest is whether the State pension amount could be increased? (And don't want it to be detrimental either!)
  • jamesd
    • #7
    • 14th Jul 17, 8:00 PM
    • #7
    • 14th Jul 17, 8:00 PM
    It's worth finding out whether HMRC thinks some scheme was getting contracted out money. If they don't think so, that would support your case.
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