MHRC Self Assessment Tax Return 2021 Question.

The_Shadow

MHRC Self Assessment Tax Return 2021 Question.

I was paying to much tax on a private pension, queried this with HMRC and they refunded the overpayment by return into my bank account in March 2021

I am filling in my 2021 tax return early to get it out of the way, question is do i need to enclose the refund amount on the tax return or has it just bee cancelled out.

[Deleted User]

You need to declare the income from the private pension and the tax ultimately deducted in accordance with the P60 which you will receive.

I doubt very much that HMRC refunded money to your account in the same tax year to which the refund relates - it simply doesn’t work in that way. Almost certainly a revised code number was issued to your pension provider who automatically processed the refund through PAYE in the next payment.

So - was the refund for an earlier year? Either way it is irrelevant for your tax return.

The_Shadow

Private pension and the tax deducted will be shown on the tax return in accordance with the P6

What happened was that i received a tax calculation from HMRC for year 2019/20 saying i owed no tax.

I then received a letter from HMRC  saying  i owed £££ tax which i duly paid.

In between a new tax code was issued to my private pension provider by HMRC and i noticed some months later that my monthly pension had dropped. 

I queried with HMRC why my private pension had dropped and they confirmed that this was due to the new tax code being issued to recover the £££. They immediately realised the mistake on their part  that i had paid to much tax and to my surprise they did a BACS transfer of the money back into my account in March 2021.

My question is do i have to show the refund on my 2021/22 tax return or has it just been cancelled out and if so where would i show it on the tax return.

kuratowski

It sounds to me as if BACS transfer was a refund of your payment for 2019-20, given the underpayment was already being collected in your 2020-21 tax code.  It is most unlikely they were refunding you for 2020-21 in year by that route.

If might help if you can you find the latest tax code notice for 2020-21 (on gov.uk under personal tax account or self assessment) and post on here the details of your tax code and tax free amount.

The_Shadow

kuratowski said:

It sounds to me as if BACS transfer was a refund of your payment for 2019-20, given the underpayment was already being collected in your 2020-21 tax code.  It is most unlikely they were refunding you for 2020-21 in year by that route.

If might help if you can you find the latest tax code notice for 2020-21 (on gov.uk under personal tax account or self assessment) and post on here the details of your tax code and tax free amount.

HMRC have collected the tax i owed for 2019/20 and i am happy that i got the overpayment back. Do i need to do any thing more when i submit my 2020/21 tax return ?

[Deleted User]

The_Shadow said:

kuratowski said:

It sounds to me as if BACS transfer was a refund of your payment for 2019-20, given the underpayment was already being collected in your 2020-21 tax code.  It is most unlikely they were refunding you for 2020-21 in year by that route.

If might help if you can you find the latest tax code notice for 2020-21 (on gov.uk under personal tax account or self assessment) and post on here the details of your tax code and tax free amount.

HMRC have collected the tax i owed for 2019/20 and i am happy that i got the overpayment back. Do i need to do any thing more when i submit my 2020/21 tax return ?

Yes you do. Towards the end of the return you will be asked if there is an underpayment which was collected in 2020/21 which related to an earlier year - it may be auto-completed. If you don’t enter anything in this field you will end up with an overpayment again as, obviously, it WAS collected through PAYE.

kuratowski

Agreed with purdeyoaten2 and the above should be confirmed (with amount) on your tax code notice / tax free amount so do check.