AFPS, New Employment & the Taxman

Chris_C_4

Couldn't find anywhere else to put this so started a new thread.

This is something I learnt from bitter experience.

If you leave the Armed Forces with an immediate pension do not assume that the Tax people will automatically relate your pension to your new employment. Make sure you let them know!

I didn't and it took me 3 years to realise that I wasn't having the correct tax applied to my pension, result: approx £3,500 in owed tax! :mad:

This is particularly relevent if your combined new salary & pension are around or above the 40% threshold.

(I think that's money saving in a roundabout way)

Bernie

...normally you get charged tax in full at both ends until the tax office that looks after your pension gets to talk with the one looking after your salary. Normally you have two tax offices to deal with because the two are different.

When I left the RAF, each office wrote to me citing the other would take my tax allowance into account and both kept insisting the other was the "main" one. They were both extremely reluctant to take the lead or talk to each other, both kept providing the others number for me to chase - until I got a tad grumpy and asked them to end the ping-pong and determine which tax office was the ONE!

...but you're right, you have to lead the Tax Offices by the nose to ensure your affairs are managed properly.

:beer:

Chris_C_4

Bernie,

You were luckier than I. Neither of my tax offices (both at Ty Glas!) wrote to me or attempted to pass the buck in any way (I think I would have been happier if they had!)

I ended up paying basic rate tax on my pension when I should have been paying higher rate .... for nearly 4 years.

In the end it was me that noticed the problem and pointed it out to them.

Bernie

...and will send a you a Birthday Card!

Yeah! Right!

:beer:

moonrakerz

Chris_C wrote: »

I ended up paying basic rate tax on my pension when I should have been paying higher rate .... for nearly 4 years.

I got caught in this trap when I left the RN. They claimed I owed them about £3000, then they told me that my pension contributions didn't attract tax relief at 40%.
It took about 6 months to sort it out, I eventually won the pension argument and paid them about £800 in the end.

Paxo123

I had the same problem - despite telling the tax office that looked after my pay that I wanted the tax allowance applied to my pension, they put it on my pay as well. So....2 lots of tax allowance. But in my case, I realised after about 9 months and several very irate phone calls later, the tax allowance was removed from my pay.

You really would think in this day and age of computerisation that ANY tax office could deal with you questions and you would be treated as 1 person by the revenue rather than 1 person per tax office.,,,

sailorchief

As a retired Aircrewman, in receipt of SSP (Flying) for over 17 years, does anyone know if that pay should be included when calculating a Service Pension?

barry.66

However, the pension is calculated over the range of the rank.i.e I was earning 32 k as a Cpl. The pension is calculated over last 2 years of Cpl pay (both high and low band) So it comes at out just under 10k. Specialist pay is not used in the calculation. Hope this helps.