ESC19 and P46

rosherville

I had a small pension start in January 07 and understood tax would be deducted. In October 2010 the Revenue contacted me saying I had not paid tax on the pension. The providers told me they`d been given a code that did not require tax deduction.

I appealed under ESC19 but was told that they`d acted as soon as they became aware.

Back to provider who checked and confirmed that a P46 had been sent to Revenue in January 07.

My question is, does the P46 constitute valid information and, if so, should ESC19 apply ?

Thanks

dori2o

What years have you underpaid tax?

What tax code did they operate?

What other income did you have at the time?

How much is the underpayment?

I take it HMRC have said they never received the P46?

rosherville

2008-09 & 2009-10

522L

Pension but only in Basic Rate, not near HR.

562.50 for each year

'I have checked your records and found that we dealt with the information given by you or a relevant third party at the time we recieved it'.

Provider can verify P46 was sent, to who & where & when.

rosherville

ps. Sorry, P46 was sent in january 2008, when pension started.

jimmo

To have the best chance of making a successful appeal for ESC A19 you need to be very precise and leave as little as possible to chance.
As things stand, I am struggling with the concept that your pension started in January 2007 but you do not seem to have underpayments for 2006/07 and 2007/08.
Perhaps that is because HMRC have not actually reviewed those years but if you actually underpaid for those years then identifying those underpayments with your new found tax knowledge could well strengthen your case on the grounds of repeated failures by HMRC.
Whilst it is really important to identify what went wrong, another test for ESC A19 is the "reasonable belief" test.
Here again I am struggling.
In your opening post you said your pension started in January 07 and you understood tax would be deducted. I am guessing tax wasn't actually deducted but can you confirm?
If tax wasn't deducted when you understood it would be didn't you realise something was wrong? Didn't you do something about that?
In very simplistic terms the underpayment you have stated, £562.50 each year, could represent an annual pension of approx £2,812 and, quite frankly, if you received £234 per month any taxman will struggle with the concept that you didn't realise that tax was not actually deducted because somewhere along the line your pension payer will have notified you of your pension entitlement and you will have received payslips showing what tax, if any, has been deducted.
Moving on to your actual question it seems to me that a P46 does count as valid information for the purposes of ESC A19 but you have to bear in mind the fundamental purpose of the form.
Cutting a long story short your pension payer should have invited you to complete a declaration on form P46 and, depending on what you declared they would put you on code 647 (cumulative), 647 (month1) or BR without any input from HMRC.
Speaking as a former taxman you should really not be surprised that my instinctive reaction is that you probably did something wrong when completing the P46 and that is the root of your problem.
If you can pick the bones out of that then we may be able to help but if you can't you would probably be better advised to seek professional or charitable, help.

Cat1

Jimmo - he has corrected his original post and confirmed his pension actually started January 2008 - so 2007/2008. HMRC only assessed 08/09 onwards when COP was replaced with the new all singing all dancing (Ahem!) system. Everything pre 08/09 was cleared as Z but you can still view it and I assume (I say assume as I'm not processing staff - happy to be corrected!) issue an assessment should you have reason to.

As Jimmo said, he needs to look at the original data that the pension provider sent to HMRC and see what statement was ticked on the P46. However I believe that on receipt of a P46 from a pension provider (or form P160 pension from a previous employer) that a form P161 (pension enquiry form) should have been issued asking for retirement details and any other occupation / private pensions you were receiving. Do you recall receiving one of those? Sounds to me like the P46 was never received by HMRC.

rosherville

Correct, pension commenced Jan 08 along with a work pension (with tax deducted) and state pension.

I did not receive the P46 or anything associated, the pension provider has confirmed all details of, and, their informing the revenue with a P46.

'any taxman will struggle with the concept that you didn't realise that tax was not actually deducted'

Am I so unusual that when I saw three separate amounts, that seemed roughly correct, in my bank account; I assumed all was well ?

jem16

rosherville wrote: »

I did not receive the P46 or anything associated, the pension provider has confirmed all details of, and, their informing the revenue with a P46.

I am a little confused here. A P46 must be completed by you and signed by you. Did you complete a P46?

If the pension provider sent in a P46 without it being completed by you , they are required to use the 0T code which sees tax at Basic Rate.
http://www.hmrc.gov.uk/forms/p46.pdf

Am I so unusual that when I saw three separate amounts, that seemed roughly correct, in my bank account; I assumed all was well ?

Did you not receive payslips for the pension?

rosherville

i. We`re talking 3 years ago, I don`t recall filling in a P46, but provider states it was sent in.

ii. Yes for for works pension but not for pension in question !

jem16

rosherville wrote: »

i. We`re talking 3 years ago, I don`t recall filling in a P46, but provider states it was sent in.

I would ask the provider for a copy of it.

ii. Yes for for works pension but not for pension in question !

Ask them for payslips too.

jennifernil

I think the problem probably is that you have 3 pensions and have not specifically told HMRC this, so they have only recently tied all your various income sources together.

Your state pension would use all or most of your personal allowance, so your other pensions would need to be taxed at base rate.

You cannot just look at the 3 amounts coming into your bank and decide they look about right without using the proper figures. You have to add all your incomes together, deduct personal allowance, calculate total tax due, THEN see if your 3 amounts add up to the correct amount. What basis did you use for assuming the 3 amounts looked about right?