Retirement Annuity Payments

Mrtumble

Hello, a note from HMRC to say that my tax code is changing. Reason given is that I now receive something called 'Retirement Annuity Payments' (around £800 per annum). 
Can anyone explain what these are?
I am 54 and not yet retired. I am in a PAYE scenario. 
Many thanks 

[Deleted User]

An income from an annuity or old style pension called a retirement annuity. What is your code? Is the 800 added or subtracted?

Mrtumble

Thanks - It is added and my code is 1339L

[Deleted User]

That means that you are being given relief (or additional relief) for pension payments made by you, not received. Do you make pension payments and, perhaps, are a higher rate taxpayer?

Mrtumble

yes - correct on both counts - thanks for your help

Dazed_and_C0nfused

Retirement annuity payments are quite rare now.

They are pensions that started before 1988 and don't get tax relief added by the pension company.

Are you certain that you are paying this type of pension contribution?  If not you could end up owing a chunk of tax.

Have you ever completed Self Assessment returns?

[Deleted User]

Dazed_and_C0nfused said:

Retirement annuity payments are quite rare now.

They are pensions that started before 1988 and don't get tax relief added by the pension company.

Are you certain that you are paying this type of pension contribution?  If not you could end up owing a chunk of tax.

Have you ever completed Self Assessment returns?

I took the view that HMRC have used that terminology whether correct or not. As you say it would be rare for someone still to be contributing to one - the option ceased in July 1988.

Dazed_and_C0nfused

[Deleted User] said:

Dazed_and_C0nfused said:

Retirement annuity payments are quite rare now.

They are pensions that started before 1988 and don't get tax relief added by the pension company.

Are you certain that you are paying this type of pension contribution?  If not you could end up owing a chunk of tax.

Have you ever completed Self Assessment returns?

I took the view that HMRC have used that terminology whether correct or not. As you say it would be rare for someone still to be contributing to one - the option ceased in July 1988.

I'm wondering if the op has inadvertently claimed RAR in the past and HMRC are including it in his tax code on that basis?

[Deleted User]

Dazed_and_C0nfused said:

purdyoaten2 said:

Dazed_and_C0nfused said:

Retirement annuity payments are quite rare now.

They are pensions that started before 1988 and don't get tax relief added by the pension company.

Are you certain that you are paying this type of pension contribution?  If not you could end up owing a chunk of tax.

Have you ever completed Self Assessment returns?

I took the view that HMRC have used that terminology whether correct or not. As you say it would be rare for someone still to be contributing to one - the option ceased in July 1988.

I'm wondering if the op has inadvertently claimed RAR in the past and HMRC are including it in his tax code on that basis?

Indeed - or even the entry put into the wrong box on the tax return (perhaps what you meant?) Could indeed be problematic for the op.

BOX 1

 Payments to registered pension schemes where basic rate tax relief will be claimed by your pension provider (called ‘relief at source’). Enter the payments and basic rate tax

BOX 2

Payments to a retirement annuity contract where basic rate tax relief will not be claimed by your provider

xylophone

https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/tax-relief-and-contributions#:~:text=If you're paying contributions,higher rate relief) from HMRC.

If you’re paying contributions into certain types of pension scheme (such as a retirement annuity contract that you started before 6 April 1988) and your contribution is not treated as paid net of basic rate income tax relief, you can claim back all tax relief due (both basic rate and any higher rate relief) from HMRC.

It seems very odd that  the OP has only just this year been advised  of RAC relief?

that I now receive something called 'Retirement Annuity Payments'

[Deleted User]

xylophone said:

https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/tax-relief-and-contributions#:~:text=If you're paying contributions,higher rate relief) from HMRC.

If you’re paying contributions into certain types of pension scheme (such as a retirement annuity contract that you started before 6 April 1988) and your contribution is not treated as paid net of basic rate income tax relief, you can claim back all tax relief due (both basic rate and any higher rate relief) from HMRC.

It seems very odd that  the OP has only just this year been advised  of RAC relief?

that I now receive something called 'Retirement Annuity Payments'

Yes - it’s possible that it was put in the wrong box in his latest return (one speculates).