Requesting HMRC treat backdated pension as earnt in tax year it was originally due - help please

justcheckin

Following the excellent advice received in this thread: https://forums.moneysavingexpert.com/discussion/6113696/back-dated-payments-from-a-lost-pension-can-these-typically-be-ascribed-to-2-tax-years

I have drafted a letter for my mum to send to HMRC. I have never done anything like this before, and would be grateful if any of the knowledgeable posters here could comment if this detail will be correct/sufficient for HMRC purposes?

Many thanks.
Letter draft below:

I am due to receive 2 sums of money from the Teacher’s Pension Scheme comprising amounts as follows:

Tax free Pension Commencement Lump sum: £2997.18

14 years of backdated Annual pension of £974.88; total: 13648.32

I understand from HMRC EIM74103 that I may request that the above backdated amounts be treated for income tax in the years they would have been due viz: ‘The pensioner should contact the tax office and supply a schedule showing the years to which underpayments are attributable. HMRC will spread the payments back over the relevant years and recalculate liability. Underpayments in the earlier years may be set-off against the resulting over-payment in the year of the lump-sum payment.’

I understand from the above that I need to indicate a schedule of how the amounts should be treated.

Per Teacher’s pension guidance here: https://www.teacherspensions.co.uk/members/once-retired/when-you-receive-your-pension.aspx the pension would usually be paid monthly in arrears.

My normal retirement date for this pension was 11/03/2006.

I therefore request that you use the following schedule to classify these payments for income tax:

 

Tax year 2006/7 First monthly payment of £81.24 ascribed to: 11/04/2006, 11 further payments of £81.24 ascribed to this tax year, total to be ascribed to this tax year: £974.88

Tax year 2007/8 First monthly payment of £81.24 ascribed to: 11/04/2007, 11 further payments of £81.24 ascribed to this tax year, total to be ascribed to this tax year: £974.88

Tax year 2008/9 First monthly payment of £81.24 ascribed to: 11/04/2008, 11 further payments of £81.24 ascribed to this tax year, total to be ascribed to this tax year: £974.88

Tax year 2009/10 First monthly payment of £81.24 ascribed to: 11/04/2009, 11 further payments of £81.24 ascribed to this tax year, total to be ascribed to this tax year: £974.88

Tax year 2010/11 First monthly payment of £81.24 ascribed to: 11/04/2010, 11 further payments of £81.24 ascribed to this tax year, total to be ascribed to this tax year: £974.88

Tax year 2011/12 First monthly payment of £81.24 ascribed to: 11/04/2011, 11 further payments of £81.24 ascribed to this tax year, total to be ascribed to this tax year: £974.88

Tax year 2012/13 First monthly payment of £81.24 ascribed to: 11/04/2012, 11 further payments of £81.24 ascribed to this tax year, total to be ascribed to this tax year: £974.88

Tax year 2013/14 First monthly payment of £81.24 ascribed to: 11/04/2013, 11 further payments of £81.24 ascribed to this tax year, total to be ascribed to this tax year: £974.88

Tax year 2014/15 First monthly payment of £81.24 ascribed to: 11/04/2014, 11 further payments of £81.24 ascribed to this tax year, total to be ascribed to this tax year: £974.88

Tax year 2015/16 First monthly payment of £81.24 ascribed to: 11/04/2015, 11 further payments of £81.24 ascribed to this tax year, total to be ascribed to this tax year: £974.88

Tax year 2016/17 First monthly payment of £81.24 ascribed to: 11/04/2016, 11 further payments of £81.24 ascribed to this tax year, total to be ascribed to this tax year: £974.88

Tax year 2017/18 First monthly payment of £81.24 ascribed to: 11/04/2017, 11 further payments of £81.24 ascribed to this tax year, total to be ascribed to this tax year: £974.88

Tax year 2018/19 First monthly payment of £81.24 ascribed to: 11/04/2018, 11 further payments of £81.24 ascribed to this tax year, total to be ascribed to this tax year: £974.88

 

Current tax year: 12 payments of £81.24, total: 974.88

To the best of my knowledge, my taxable earnings in all of the above years was and remains below the personal allowance.

Many thanks,

Her name, her DOB, her NI number

DT2001

Looks good. Presumably you’ll send copies of the letters from the pension administrators supporting how the payments are made up. You could phone up and ask if they would need anything else (copy of any income received - State Pension). HMRC are normally very helpful. Get the ball rolling.

justcheckin

Thanks. I'm trying to get copies of her self assessments from those years. I have nothing on paper from the TPS, would a screen grab of the 1) annual benefit and 2) the PCLS be sufficient?

DT2001

Phone HMRC as we are second guessing what they need.
How was your Mum advised of the amount due and how the TPS calculated it?
If she is doing self assessments (my mother doesn’t any longer being well under the personal allowance) you’ll have an office to contact, I assume.

molerat

One question - is it genuinely £974.88 per year with no inflationary increases ?

mgdavid

they may well not go back more than 7 years....

xylophone

One question - is it genuinely £974.88 per year with no inflationary increases ?

Not impossible if it is wholly made up of pre 88 GMP.

I did  ask OP about this but I think the questions re GMP must have been missed.

https://forums.moneysavingexpert.com/discussion/comment/76931201#Comment_76931201

When did she become entitled to State Pension?
Was her TPS pension accrued prior to 6/4/1997?
What does her pension advice from TPS show? Is a GMP mentioned? If so, is it shown as pre 1988?

The OP says of mother's SP increase letter

Her letter received this Feb stating her post April entitlements gives a breakdown of: £80.45 Basic SP, Post 97 ASP of £0.36 and Graduated Retirement Benefit of £1.15. 

justcheckin

xylophone said:

When did she become entitled to State Pension? 11/03/2006

Was her TPS pension accrued prior to 6/4/1997? Yes she finished service in 1973 for this pension
What does her pension advice from TPS show? Is a GMP mentioned? If so, is it shown as pre 1988? Really unfortunately, the detail showing on screen was this detailed, but as soon as I showed her how to apply for it to be put into payment, the annual benefits statements all dissappeared. I'm assuming she will now receive something by mail? I did screen grab, but I hadn't clicked to maximise each mini window.

The OP says of mother's SP increase letter

Her letter received this Feb stating her post April entitlements gives a breakdown of: £80.45 Basic SP, Post 97 ASP of £0.36 and Graduated Retirement Benefit of £1.15. 

Sorry I did intend to come back to this, but am working all hours on their money and my own life, and it slipped through the net! Thanks for following up

justcheckin

I understood it that the backdated years would be inclusive of their revaluation in line with CPI. However I realise that this is possibly unduly optimistic!

justcheckin

I did manage to save a pdf since we sent the form, and it shows a date to which a pension increase has been applied, does that help?
I can also see a service history in n. days broken down by years or 6m intervals, and the 80ths accrual.

She is also being nominated as a 'method c' being applied to her pension (which seems to have been based on the best 6 months salary she earnt)

I hope some of this is useful!

xylophone

In which years was she a member of the TPS? Pre 1988? Post 1998? Post 1997?
Is there any mention of GMP on the information given by TPS?