Longer term deferring

eastcorkram

badmemory wrote: »

In theory this lump sum has already been taxed (annually via the pension). It will be interesting to see if HMRC refund the tax overpaid for all these years or adhere to the 4 complete years currently in force, especially as it was their mistake!

Indeed. If we ever get to the bottom of it, I'll post it here. I suspect it will just be the last four years or so.

xylophone

Have you contacted Equiniti?

With regard to the tax situation, be prepared for HMRC to take the view that it is a tax payer's responsibility to check his tax code and advise them if it isn't correct.

eastcorkram

xylophone wrote: »

Have you contacted Equiniti?

With regard to the tax situation, be prepared for HMRC to take the view that it is a tax payer's responsibility to check his tax code and advise them if it isn't correct.

Yes to the Equiniti question.

Yes, prepared for that response from hmrc. Nevertheless, I think it's worth asking the question.

xylophone

Nevertheless, I think it's worth asking the question.

It's certainly worth asking the question but assuming that your FIL has been receiving his annual P2 (which presumably is showing an adjustment for a state pension in payment), they might be inclined to take a robust view of the circumstances.

Let us know how you get on.

kidmugsy

eastcorkram wrote: »

Not sure of the gross figure off the top of my head, but more than 14k forces pension, plus now of course, his state pension.

Then you're right: he'll pay 20% income tax irrespective of which year he begins the pension or takes the lump sum.

As for the income tax: good luck. The Revenue might decide it's his own fault, not theirs.

kidmugsy

eastcorkram wrote: »

Not sure of the gross figure off the top of my head, but more than 14k forces pension, plus now of course, his state pension.

Then you're right: he'll pay 20% income tax irrespective of which year he begins the pension or takes the lump sum.

As for the erroneous income tax: good luck. The Revenue might decide it's his own fault, not theirs.

badmemory

As HMRC take the state pension payment from info provided by the DWP I suspect you may be right. Which means that the DWP have been providing incorrect info to HMRC which will hopefully provide some ammunition. Unfortunately, you may do better to say that they were vulnerable. But no-one really would want to do that to a relative as it would be far too upsetting on both sides.

Even if they do decide it is your FILs fault you should still get the last 4 full years back or all the deferred amount tax free to reflect the DWPs gross error - repeated for years, they are after all both (linked) government departments.