Inland Revelue -asking for TAX on Bereavement Payment [£2000] (but its non taxable)

katesheet

Inland Revelue -asking for TAX on Bereavement Payment (but its non taxable) Bereavement allowance Lump sum (Non taxable £2000) has been Taxed!

Bereavement allowance of partner’s death

They died, and the widow managed to get £3000 bereavement payments

This is made of 2 parts

1) Bereavement allowance, (which is weekly amounts paid weekly, upto 1 year of the death) (This is taxable)
2) Bereavement payment which is a lump sum payment of £2000 (Not taxable)

£2000 the 1 time Lump sum payment (which is NOT taxable)

and £1000 of weekly payments (all added up to make £1000, this IS taxable)


But HMRC have sent a tax breakdown page, saying that some tax is owed on it,
on the whole £3000.


The £2000 shouldn’t be included, as it is Non-taxable.
that tax is only owed on the £1000 only

Is this an HMRC mistake?

Before sending them the unpaid money,
should we send a letter by us, saying it is a mistake?, and that No tax is payable on the £2000 ?

If a letter Is sent, how long do they usually take to send back a corrected form ?


Or the Full amount should be paid,…and then it should be ‘reclaimed back’ as paying too much tax afterwards?


Has this happened to you? how was it resolved ??
Bereavement allowance Lump sum (Non taxable £2000) has been Taxed!

Bereavement allowance of partner’s death

They died, and the widow managed to get £3000 bereavement payments

This is made of 2 parts

1) Bereavement allowance, (which is weekly amounts paid weekly, upto 1 year of the death) (This is taxable)
2) Bereavement payment which is a lump sum payment of £2000 (Not taxable)

£2000 the 1 time Lump sum payment (which is NOT taxable)

and £1000 of weekly payments (all added up to make £1000, this IS taxable)


But HMRC have sent a tax breakdown page, saying that some tax is owed on it, on the whole £3000.


The £2000 shouldn’t be included, as it is Non-taxable.
that tax is only owed on the £1000 only

Is this an HMRC mistake?

Before sending them the unpaid money,
should we send a letter by us, saying it is a mistake?, and that No tax is payable on the £2000 ?

If a letter Is sent, how long do they usually take to send back a corrected form ?


Or the Full amount should be paid,…and then it should be ‘reclaimed back’ as paying too much tax afterwards?



Has this happened to you? how was it resolved ??

.

sleepless_saver

As you say, the £2000 bereavement payment is not taxable. Probably a lot simpler to challenge it (in writing) rather than paying and having to reclaim. You could quote their own guidance at them, that should help. http://www.hmrc.gov.uk/manuals/eimanual/EIM76100.htm

[Deleted User]

they are trying to charge me £750 tax on IB paid to me in 2010/11 they reckon i received over £10,000 when in fact it was just over £5000 i sent them proof and refused to pay it