Pension Contributions affecting Tax Credits

pollyanna24

I was never aware of this until a few days ago and have always put down my gross income not taking off pension contributions.

I think I never realised because I started claiming tax credits before I started contributing to a pension and so when the renewal pack came through asking for any changes, it never occurred to me that this was a change as they mention someone living with you or your income changing.

My tax credits has been amended for 2018/19 and the person on the phone said that I could write a letter asking for back years to be considered.

Before I collate all the information re my pensions (have a work one and a private one), can anyone tell me is it worth it or will they just say tough luck, you should have realised?

I started paying into pensions in 2014/15 and it's not huge amounts we are talking about, but every little counts, right?

[Deleted User]

Tough luck I'm afraid. Once a years claim is finalised that's it, it can't be changed. Tax credits can also only be backdated 3 months.

Icequeen99

_shel wrote: »

Tough luck I'm afraid. Once a years claim is finalised that's it, it can't be changed. Tax credits can also only be backdated 3 months.

That isn't correct. A finalised award can be changed under appeal, due to official error or for compliance reasons.

OP - you can put in a late appeal against the 17/18 finalised award but they may not accept you have good grounds for an appeal. Earlier years you won't be able to claim.

Tax credit backdating is 31 days for new claims and changes 1 month - 3 months was a fair few years ago.

IQ

Dazed_and_confused

Before I collate all the information re my pensions (have a work one and a private one),

I don't think it's likely to be worth collating anything regarding the works pension as you won't be able to deduct it.

It is almost certainly already deducted in the sense that your "salary" is, say, £30,000 and you pay say 10% into the works pension so your taxable pay which is used for income tax purposes is only £27,000. This would be what's shown on your P60 and is our P60 almost certainly already used on your renewal.

If you were to deduct the £3,000 again you would be double counting it.

calcotti

Dazed_and_confused wrote: »

I don't think it's likely to be worth collating anything regarding the works pension as you won't be able to deduct it.

It is almost certainly already deducted in the sense that your "salary" is, say, £30,000 and you pay say 10% into the works pension so your taxable pay which is used for income tax purposes is only £27,000. This would be what's shown on your P60 and is our P60 almost certainly already used on your renewal.

If you were to deduct the £3,000 again you would be double counting it.

Not all pension deductions are made this way. Some employers will take the pension deductions from net pa in which case the OP should be deducting them. OP needs to check how pension deductions are made in his particular case. The difference is explained here https://thepeoplespension.co.uk/help/knowledgebase/are-the-contributions-paid-net-or-gross/. Note in particular that low paid employees are better off in respect of building their pension if pension deductions are taken from net pay.