Wrong date on P45 from Pension provider..this will affect amount of tax paid. they refuse to correct

Merlin29

I cashed in 3  pensions in full before 4th April 2021. All were paid into my bank account by 1st April 2021.  2 of the providers issued the correct leaving  dates so the income is  taxable for 20/21. However,the 3rd has put 8th April 2021 as the leaving date on the P$% and HMRC has allocated this income to 21/22.  I contacted HMRC, they advised contacting the pension provider to amend P45 to correct date and they would include it in 20/21 tax year. 
The Pension provider have advised that it is HMRCs fault.. that they have used the date  they , the HMRC processed it.. .. contact them..it's their mistake.. I have made several attempts to get them to understand that they, pension provider, must change it.. they refuse to do so.
The problem is that if this is allocated to 21/22 tax year, then I will have to pay a significant extra amount in tax. I have already been over taxed by the other 2 providers and am hoping to get my refund as soon as possible. I complete a self assessment online and although there has been an extension of 1 month, I am not going to have access to online for a few weeks..I have been asking for this for a few weeks now. Surely they cannot make me pay extra tax because they refuse to correct the leaving date.. they paid the money into my bank account on 1st April 2021. please if someone could advise my next step, I would appreciate it.

Dazed_and_C0nfused

Not really sure what the problem is here, think you are missing the concept of Self Assessment.

Why aren't you completing the Self Assessment with the figures you believe are correct?

Also, the Real Time Information details employers and pension payers have to submit to HMRC include the payment date so whenever they sent it or HMRC processed it is irrelevant, it's what they reported as the payment date that counts.

Have you checked your Personal Tax Account to see if this shows up in 2021:22 or 2020:21 on there??

Merlin29

yes it shows up in 2021:22  this means I will be in a higher tax rate....

Merlin29

i do not know who to escalate this to. how can they pay out and close the fund on 1st April 2021  yet insist that it should be allocated to 21 to 22 as that was the leaving date they put on the p45.. they even say it would be illegal if they changed it.. HMRC say they can correct it and they should .send them amended P45

Dazed_and_C0nfused

I think the thing you need to establish is if the payment was filed for 2020:21 or 2021:22.

It might be they have used two different dates (one in 2020:21 for the payment date and one in 2021:22 for the P45 date) which could have confused HMRC?

Have you asked the pension company what they entered as the payment date on the submission to HMRC?

If they are adamant that this was a date in 2020:21 then the next step would be to ask HMRC to check what Real Time Information submission(s) were received from that company for 2020:21.  Do not mention 2021:22.

The link below explains what can be included on the RTI submission and there are separate entries for the payment date and the date an employment (or pension) ended.

https://www.gov.uk/guidance/what-payroll-information-to-report-to-hmrc#pay-and-deductions

Dazed_and_C0nfused

I should add that I don't believe for one minute that HMRC allocate anything with reference to a date of leaving/employment ending.  What matters is the payment date.

Payments after leaving are nothing unusual for employers and it wouldn't be out of the ordinary for an employer to report a payment today for someone who left in say March 2021.  The employee would have still left the employment in March 2021 but that doesn't alter the fact that a payment made today (and reported as paid today) is income of 2021:22.

Merlin29

Thanks for your help. I have looked at the link.and understand what you have said.. This is my point.. they, the company have allocated the payment date and the leaving date as the same via their payroll.
The tax office say that they, the company, should and are able to amend this.I note that HMRC penalises mistakes if incorrect information is submitted via the payroll and further penalise if they are made aware of the mistake and do nothing about it. I will pursue this further. as it is going to make a significant difference to my tax rate for 21/22 to my cost.

Dazed_and_C0nfused

they, the company have allocated the payment date and the leaving date as the same via their payroll.

Presumably the date used is 6 April 2021 or later.

In which case I don't think amending the payment date will be possible (not to get the outcome you want anyway).

If they have reported the income in the wrong tax year then I believe they would need to file two corrections,

1).  An update to 2021:22 reducing the pay (pension) and tax reported to NIL.

2).  An update to 2020:21 reporting the pay (pension) and tax deducted.

Have the pension company told you the payment date they claim they submitted to HMRC?

Dazed_and_C0nfused

they, the company have allocated the payment date and the leaving date as the same via their payroll.

Presumably the date used is 6 April 2021 or later.

In which case I don't think amending the payment date will be possible (not to get the outcome you want anyway).

If they have reported the income in the wrong tax year then I believe they would need to file two corrections,

1). An update to 2021:22 reducing the pay (pension) and tax reported to NIL.

2). An update to 2020:21 reporting the pay (pension) and tax deducted.

Have the pension company told you the payment date they claim they submitted to HMRC?

Merlin29

Hi ,
Thanks again.
I believe I am trying to say the same thing as you but not being as precise.
In effect, if they applied the 2 corrections, then the payment date would be altered and would fall into the correct year  i.e.  20/21. This is exactly what I want them to do and this is what they are refusing  to do.
8th April is the date that they submitted as payment date.

sheramber

Was the amount calculated to 8 April?

I was paid my salary to the last day of the month but it went into the bank on the last  working day of the month so most months it was paid into  the bank   before  the actual payment date.