MSE News: Pensioners hit by further HMRC tax code errors
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For Pennywise: State Pension was only added to the tax system about 3 years ago
Don't be riduculous - it's always been classed as taxable income.plus you used to be able to take a lump sum tax free from a company pension on retirement, it also gets taxed, that was introduced arround 2008/2009.
Rubbish! I am entitled to a tax-free lump sum from my teacher's pension.
http://www.direct.gov.uk/en/Pensionsandretirementplanning/Companyandpersonalpensions/CompanyPensions/DG_10026617
Where on earth do you get your information from?0 -
For Pennywise: State Pension was only added to the tax system about 3 years ago plus you used to be able to take a lump sum tax free from a company pension on retirement, it also gets taxed, that was introduced arround 2008/2009.
Wrong on both counts. Making fundamental errors does nothing to help your arguments.0 -
Two quotes from the main article -
"While not everyone in that category (over 65) has underpaid, no-one outside that group is affected."
"This same group of 146,000 pensioners also owed tax from 08/09 and 09/10 tax years. However, HMRC has written off these demands."
I am under 65 and have just had a payment request for 09/10 for over £1,000 as my state pension had not been taxed and I was apparently on the wrong tax code. Now wondering whether this amount will be written off for me?:eek:0 -
After reaching pensionable age in Dec 2011 I received a "Notice of Coding" change from the HMRC Office in Liverpool which reduced my tax-free income substantially and contained several errors including one which stated that my code was being reduced because I will receive an estimated £5000+ in state pension for the year 2011/12, ie. a whole year's worth of state pension. Now anyone with a basic understanding of maths would be able to show that if a person turned 65 in Dec 2011 they wont receive a full year's pension by April 2012.
I wrote to HMRC (twice + letters of complaint + letter to my MP), pointing out their errors to no avail. The change of coding went through anyway and my occupational pension provider promptly deducted half my normal pension income for January 2012, leaving me short of money at a time when bills are highest.
The people who work for the HMRC are either morons or vindictive barstewards who are accountable to no one.0 -
The other 'error' by HMRC is that the coding letter sent out when you are 64 (ie aged 65 during the following tax year) assumes a total income above £28930, despite having been on a pension of roughly £12,000 for the previous 2 years.
Pensioners need to really read and understand these coding letters, I have a little sum on my spreadsheet, so can check my own and my friends' tax letters.
It's absolutely disgraceful that HMRC should make this assumption which is not in the interests of the taxpayer.0 -
After reaching pensionable age in Dec 2011 I received a "Notice of Coding" change from the HMRC Office in Liverpool which reduced my tax-free income substantially and contained several errors .Jennifer_Jane wrote:The other 'error' by HMRC is that the coding letter sent out when you are 64 (ie aged 65 during the following tax year) assumes a total income above £28930,
despite having been on a pension of roughly £12,000 for the previous 2 years.
Easy way around both problems. Complete the P161 they issue just before State Pension age.If you want to test the depth of the water .........don't use both feet !0 -
Easy way around both problems. Complete the P161 they issue just before State Pension age.
Even my MP, who confessed to me that he has received numerous complaints about HMRC, seems powerless to do anything about this continuing ineptitude.0 -
....I'm very thorough when it comes to finance.
In which case you would be aware that if they don't issue a P161 .... you should request one.I will receive an estimated £5000+ in state pension for the year 2011/12
This comes from DWP, not HMRC. Hence the importance of the P161.If you want to test the depth of the water .........don't use both feet !0 -
After reaching pensionable age in Dec 2011 I received a "Notice of Coding" change from the HMRC Office in Liverpool which reduced my tax-free income substantially and contained several errors including one which stated that my code was being reduced because I will receive an estimated £5000+ in state pension for the year 2011/12, ie. a whole year's worth of state pension. Now anyone with a basic understanding of maths would be able to show that if a person turned 65 in Dec 2011 they wont receive a full year's pension by April 2012.
Actually .... that sounds correct to me! Due to the way the code number system works, they will have correctly included the equivalent of a full year's pension in your code, but should have also switched your code to be operated on a non-cumulative Month 1 Basis, which taxes each month is isolation and ignores what has happens in previous months. You would then have had roughly the correct amount deducted in January and subsequent months. However, if they forgot to switch you to Month 1 Basis, it would have resulted in a very very large deduction in January.0 -
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