Pension Tax

ConfusedDave_2

Hi there,

My father in law has a pension that he has been receiving for 10 years.

His tax code was 647L or similar and his taxable pension income was £6020.00 therefore he had never paid tax on this.

This month he has BR as a tax code and they have taken approx. £200 from his £500 pension amount.

We contacted the Inland Revenue and they advised him he would have to pay back the tax for the last 10 years at the rate of approx. £200 a month.

Is this right? Surely they can't chase tax for that length of time and surely he shouldn't pay any as it is less than his code?

He does still work and pays tax on his income.

Can anyone advise please?

Thanks

Dave

scoobs02

Is that his only income? Does he receive State Pension? And is he over 65? I dont think HMRC have given you the correct info.

CLAPTON

as he has more than one income then only one can benefit from the 647L; the others will probably be on BR

list his different incomes and the taxcode that applies to each (it will be on the payslips)

but if he works are earns more than £6475pa then his pension should be taxed at BR i.e. 20%
if he previously paid no tax on the pension income then he will owe back tax

how old is he?

jem16

ConfusedDave wrote: »

He does still work and pays tax on his income.

If he still works and pays tax on his income then BR is the correct code for his pension.

Basically you only have one set of personal allowances, not two. If he has 647L on both his work income and his pension this is wrong and clearly he owes tax.

How far back they can go I'm not sure.

ConfusedDave_2

Thanks for the advice.

He is 63 and I think that's right. he will be BR for his pension but I would like to clarify how far back they can go, ten years seems a bit extreme to me.

Dave

mjm3346

6 years is normal, but if there has been avoidance they will go as far back as they want.


If the tax office had all the information and were at fault this may be of some use


http://www.taxationweb.co.uk/forum/underpayment-of-income-tax-t27321.html

molerat

In those ten years has he ever filled in a tax return and if so did he mention this pension income ?