Tax due in year 08/09 on deferred pension to 09/10

paul82uk

Hi all hope you are all well.

My Mother received a letter from HMRC saying she owes them £620 tax.

My Mother was able to receive her pension in fiscal year 08/09 but deferred it for a year until 09/10.

From the information sent by HMRC they say she was receiving the pension in 08/09 as well as final salary and private pension and hadn't paid enough tax so owes £620.

Does she pay tax in year on pension she has not yet received for 08/09? Or only once she receives the pension she will pay tax?

kidmugsy

It sounds to me as though HMRC have simply assumed that your mother drew the pension. When my wife deferred her pension we warned HMRC and they managed to cope the first year, but then seemed somehow to forget it. Anyway, I think your mother should phone or write to point out that she did not recieve the pension. No pension means no tax on the pension.

paul82uk

thanks i thought that would be the case.

We going to gain confirmation from the DWP for when the pension started and speak to HMRC again hopefully this will be enough to confirm when the pension started

Mikeyorks

I assume we're talking State Pension?

Tax is due on a pension when you're 'entitled' to it - not when it's paid. But the formal deferment offered by DWP creates an exception to that .... the tax treatment is different, however, if the deferred pension is taken as a lump sum or an enhancement.

I suspect the latter - and that this sounds more like a DWP misunderstanding in their communication to HMRC.