Tax Credits Renewals - 2015

too_much_debt

Hi

Yes, sorry the bolded figure should be £5156.77.

There is a final pay slip from the old company.

Total payments 324.63 (includes 1.10 fire marshall, 299.62 basic pay, 22.39 London weighting, 1.52 supplement

Tax paid -106.20, NI Contracted O- 0.00, LGPS 6.5% 21.10
Total deductions -85.10

Total gross 23398.60
Taxable gross 21877.71
tax paid 2707.20
Employees NI 1790.38
Employers NI 1723.43
Pens'able gross 23398.60
Ees pension 1520.89
Ers pension 3018.42

Net pay: 409.73


His P60 for tax year to 5 Apr 2015 has:

This employment : Pay 7849.27 Tax deducted 1236.20

Previous employment: Pay 21877.71 Tax deducted 2707.20

Total for year £29,726.98 3943.40

zagfles

too_much_debt wrote: »

Hi

Yes, sorry the bolded figure should be £5156.77.

There is a final pay slip from the old company.

Total payments 324.63 (includes 1.10 fire marshall, 299.62 basic pay, 22.39 London weighting, 1.52 supplement

Tax paid -106.20, NI Contracted O- 0.00, LGPS 6.5% 21.10
Total deductions -85.10

Total gross 23398.60
Taxable gross 21877.71
tax paid 2707.20
Employees NI 1790.38
Employers NI 1723.43
Pens'able gross 23398.60
Ees pension 1520.89
Ers pension 3018.42

Net pay: 409.73


His P60 for tax year to 5 Apr 2015 has:

This employment : Pay 7849.27 Tax deducted 1236.20

Previous employment: Pay 21877.71 Tax deducted 2707.20

Total for year £29,726.98 3943.40

Right then, it all makes sense now.

The old company deducted pension contributions before tax.

The new company are deducting pension conts after tax.

So the correct figure to declare to tax credits is the P60 income minus the grossed-up pension conts with the new company only.

I make total pension conts with the new company £379.28 up to the end of the tax year (check this).

Grossing it up (divide by 0.8) gives £474.10.

Taking this off the P60 gives £29252.88 (again check my maths it's a bit late!)

However, declaring this will cause you hassle. Tax credits might query it, or even ignore it and use the figures they have. The people answering the phones will likely give you incorrect info and simply tell you you can't deduct any workplace pension conts. They are wrong.

But if even HR are giving you wrong info, if they do query it you could struggle to convince them. There should be something in the pension literature for the new company's scheme which says they take pension contributions after tax and they reclaim the tax from HMRC? Maybe contact STandard Life and get them to confirm it, preferably in writing.

too_much_debt

zagfles wrote: »

Right then, it all makes sense now.

The old company deducted pension contributions before tax.

The new company are deducting pension conts after tax.

So the correct figure to declare to tax credits is the P60 income minus the grossed-up pension conts with the new company only.

I make total pension conts with the new company £379.28 up to the end of the tax year (check this).

Grossing it up (divide by 0.8) gives £474.10.

Taking this off the P60 gives £29252.88 (again check my maths it's a bit late!)

However, declaring this will cause you hassle. Tax credits might query it, or even ignore it and use the figures they have. The people answering the phones will likely give you incorrect info and simply tell you you can't deduct any workplace pension conts. They are wrong.

But if even HR are giving you wrong info, if they do query it you could struggle to convince them. There should be something in the pension literature for the new company's scheme which says they take pension contributions after tax and they reclaim the tax from HMRC? Maybe contact STandard Life and get them to confirm it, preferably in writing.

Thank you so much, you are so kind!


Couldn't see anything on the paperwork saying they take it after tax and the HR woman said it was taken off before so will get back on to her and ask her to check his pay since February and ask her to explain it in writing.


Not sure whether to just confirm the £29,726 with child tax credits, not sure if it makes much difference to my payments if it's only £500 difference.


Thanks again for taking the time to help and explain it for me.


TMD

zagfles

too_much_debt wrote: »

Thank you so much, you are so kind!


Couldn't see anything on the paperwork saying they take it after tax and the HR woman said it was taken off before so will get back on to her and ask her to check his pay since February and ask her to explain it in writing.

You should also get an annual statement from Standard Life, this should show tax being reclaimed from HMRC. This is the important bit - a statement showing tax reclaims is proof that pension conts are taken after tax. Where pension conts are taken before tax there is no tax reclaim on contributions because tax relief is given through the payslip.

I think they generally do statements not long after the end of the tax year. If not, you could ask them for a statement of contributions which should show tax reclaims. This isn't just neeed for people who claim tax credits, it's needed for people who do tax returns, or who pay higher rate tax, so they should be used to people needing one.

Not sure whether to just confirm the £29,726 with child tax credits, not sure if it makes much difference to my payments if it's only £500 difference.

It'll likely make £200 or so difference for this year. But that was only on 3 months contributions, next year it'll be a whole year so about £2000 difference in income, maybe £800 or so difference in tax credits.

Probably best to get it sorted now - see if you can get a statement from Standard Life in the next few weeks, that will provide the proof you need if tax credits query it. Or maybe from the company - is there a pensions dept you can speak to bypassing HR?

Thanks again for taking the time to help and explain it for me.


TMD

No problem. It's good to be appreciated, amazing the number of people who don't even bother clicking the Thanks button after you've helped them! Good luck!

gayleygoo

I am going to write to HMRC notifying them of our new baby, who is now almost 7 weeks old and for the past 4 weeks I have been unable to get through to them on the phone :eek: I dread to think what the cost will be on my mobile bill. Do I need to send anything with my letter, like the birth certificate?

cifpower

Claim was auto-renewed based on salary passed to them from P60. Makes things so much easier and no phone calls needed.

too_much_debt

zagfles wrote: »

You should also get an annual statement from Standard Life, this should show tax being reclaimed from HMRC. This is the important bit - a statement showing tax reclaims is proof that pension conts are taken after tax. Where pension conts are taken before tax there is no tax reclaim on contributions because tax relief is given through the payslip.

I think they generally do statements not long after the end of the tax year. If not, you could ask them for a statement of contributions which should show tax reclaims. This isn't just neeed for people who claim tax credits, it's needed for people who do tax returns, or who pay higher rate tax, so they should be used to people needing one. It'll likely make £200 or so difference for this year. But that was only on 3 months contributions, next year it'll be a whole year so about £2000 difference in income, maybe £800 or so difference in tax credits.

Probably best to get it sorted now - see if you can get a statement from Standard Life in the next few weeks, that will provide the proof you need if tax credits query it. Or maybe from the company - is there a pensions dept you can speak to bypassing HR?No problem. It's good to be appreciated, amazing the number of people who don't even bother clicking the Thanks button after you've helped them! Good luck!

Will try e-mailing HR again first and see what she comes back with. Will definitely get it sorted out, will wait to renew for now and see what comes of it all this week.


Will update with any developments.


Thanks again! Have a great weekend!

spartacusthe1st

I finally received my renewal papers. The date on the letter was 2nd may.....I got them on the 4th June!!
A month in transit floating around of Royal Mail!

Rainbowchaser

I'm really really sorry if this has been asked before. I have searched etc and couldn't find anything.

I am a part time teacher and so have a public sector pension. Do I take the amount I have contributed to my pension off my overall earnings for the year when I'm confirming my earnings for 2014-15? I've read the renewal information but I'm still no clearer!

On my P60 my taxable pay for the year was £16206.75 and I paid £1251.40 tax. On my March payslip it says I paid £1701.28 pension contributions in 2014-15 My tax code was 994L

Any advice would be gratefully received

Rainbowchaser

blondebubbles wrote: »

This was mentioned a few pages before, it depends if it deducted from your gross or net pay.

Does your payslip show gross pay and taxable pay? If so are these figures different or the same?

The pay slip shows my salary as taxable. Then under deductions it has tax, NI and pension at 9.5%