State Pension used on an SA Tax Return

DurdleDoor

I used the on-line SA system to submit my tax return for 2012/13 (on time:D).

This weekend a letter arrived from HMRC which stated that I'd understated my income by about £500, the difference being in how much State pension I receive. The amount used by the SA system appeared to be rather high so I checked my bank statements and modified the return to the sum of all payments received during the tax year 2012/13. That is the difference now in dispute. The reason why it was changed shows on the Comments Section of the return.

So, was I wrong to change the amount to the actual value I receive rather than with the default value (the amount I am 'entitled to receive') as stated by HMRC?

Am I failing to understand how the pension and tax return operate or can/should I challenge the ruling? Any help and comments would be greatly appreciated.

Mikeyorks

DurdleDoor wrote: »

So, was I wrong to change the amount to the actual value I receive rather than with the default value (the amount I am 'entitled to receive') as stated by HMRC?

Yes - you were wrong I'm afraid. The chargeable figure is the amount you were entitled to in the year not the amount actually received. Tends to only be an issue in the first year and where the pension is being paid 4 weekly (now 13 weekly is a thing of the past). After the first year it more or less sorts itself out.

http://www.hmrc.gov.uk/manuals/eimanual/EIM74101.htm


Here's 'one I made much earlier' .............. just to prove you're not the only one to fall foul of it. My birthday is latish March and I was a bit surprised that the first thing from HMRC on the subject of SP was an underpayment - for money I was entitled to - but not paid in that tax year. My SP is paid 4 weekly - I only used the 13 week to example worst case.

http://forums.moneysavingexpert.com/showpost.php?p=10617127&postcount=1

xylophone

http://www.litrg.org.uk/pensioners/life-events/coming-up-retirement/tax-code-retire might be worth a look.

barak

DurdleDoor wrote: »

I used the on-line SA system to submit my tax return for 2012/13 (on time:D).

This weekend a letter arrived from HMRC which stated that I'd understated my income by about £500, the difference being in how much State pension I receive. The amount used by the SA system appeared to be rather high so I checked my bank statements and modified the return to the sum of all payments received during the tax year 2012/13. That is the difference now in dispute. The reason why it was changed shows on the Comments Section of the return.

So, was I wrong to change the amount to the actual value I receive rather than with the default value (the amount I am 'entitled to receive') as stated by HMRC?.....

52 [occasionally 53] times 'Weekly Benefit' is what E&Y always used to submit, so that's what I show as my 'entitlement', but whatever you did, I can't imagine how there can possibly be a £500 difference. :undecided

However, I did once have great difficulty in persuading HMRC that my State Pension was greater than the figure they had apparently 'received' from DWP and therefore I wasn't due the refund they had calculated!

Mikeyorks

barak wrote: »

but whatever you did, I can't imagine how there can possibly be a £500 difference.

At a guess, and assuming he correctly added up the payments received in 12/13, then the birthday is somewhere in the first 15 days of March and creating a State Pension start date which gives a first 4 week payment just after the next 5th April

Thereby creating 3 or 4 weeks pension which is accrued (and therefore taxable) in 12/13 - but which wasn't paid until after the year end? Which can easily be £500?

chrismac1

Whist Mikeyorks' is by far the most likely cause of the problem, you can't entirely rule out an error, most probably on the part of DWP. I am currently in the fourth month of a tax case where DWP appear to have fictitiously made up over £4k of income they declared for a client which appears never to have been paid to her.

On Dec 24th I wrote to DWP with a Data Protection Act "producer" asking the for name of the beneficial owner, sort code and account the income was paid to. The HMRC followed this up with a similar request of her own in early January. So far DWP has seen fit to do nothing in response.

Let's face it this should be a 5-minute job for them. But somehow I have a feeling this case will last quite a few months more.....

DurdleDoor

Whoops HMRC 1 DurdleDoor 0

Found the problem. I downloaded bank statements from 04/12 to 04/13 to check the incoming payments. Unfortunately it seems I made an error and lost a few of the transactions for 12/12, including the one for pension payment, so the total I calculated was short by that amount. Next time I'll assume HMRC are correct and doubly check before using anything else rather than risk being hammered for late payment again.

Thanks for the help you've all given me,

DurdleDoor