Civil service pension not activated in 2018, huge tax implications, have I the right form/s?

FIREDreamer

lesleyfromkent said:

Just finishing up for the evening - thanks again to you all. 
I have been looking at the string, and although I tried to reply to each of you, I do wonder if I have made a total dog's breakfast of it. 
Well, thanks again. I shall toast you all this evening, and post later with how it all turned out.
Getting old can be a pain, but supportive places like this make it easier.
regards
Lesley

66 isn’t old - it’s the new 46! 😀

squirrelpie

Do you know anybody locally (a friend or relative maybe or citizen's advice or similar) who could sit with you whilst you try to access the government gateway? A second pair of eyes can be very helpful, even if they're not experts.

Also, I think you may find it easier to deal with your tax over time if you ask HMRC to assign the BR tax code to your pension and the variable one to your employment.

Marcon

lesleyfromkent said:

Marcon said:

lesleyfromkent said:

I have a final salary pension scheme from working in the civil service.

I am 66 – and could have taken this when I turned 60 in 2018. I did not take it for physical and mental health reasons, and a spectacularly nasty divorce.

I left it “laying on”, it was/is about £8,000 gross pa. Not a huge amount, but still, worth having.

I have activated that civil service Pension now, at the point where I just hit state pension age, and I can work the computer without panic attacks that are too big.

I seem to have paid a huge amount of tax (over £15,000) and in addition my wages (from working 2 days at Waitrose as a cashier) have dropped from £700 pm to £370pm as they seem to think I am a higher-rate tax payer – so, the forms I am filling in (P55, plus I’m doing a self-assessment but it looks like I don’t need to) don’t seem to take into account that I was a long way below the income tax thresh-hold between 2018 and now (always been minimum wage plus £1 or so). Am I able to ask for this to be taken into account? Or have I just got to suck it up and pay Higher Tax on it all now until 5 April 2025?

The actual amounts were: (checked with HMRC today as I am getting very confused):

• A gross payment of £38,000 which, with £15,495 tax taken off at source, gave me a payment of £22,454 which shows on my bank statement. This seems to be the 5 years x £8k pa “lying on”.

• The 25% tax free cashed in of £40,256, which shows on the bank statement as that amount.

I am having difficulty getting my head around what I need to do to get back any tax I may be entitled to. I think I should pay an accountant, but this is the last money I have. To be used on making my home live-able in for my old age. I seem to be paying from my current wages as if I, on minimum wage + 50p currently, am a legitimate higher rate tax-payer!

Please be kind – I have a constellation of health problems and bad bad brain fog. I tried asking the civil service pension people for help and got multitudes of complicated emails which I couldn’t understand. So I gave up, cashed it in, and activated the rest. I am happy to live with the consequences of my actions, but I do need to do whatever is correct with HMRC.

Really, I only need to know if I’m doing the correct form (P55) which doesn’t seem to have anywhere to put in that I could have taken this in 2018 -or if I’ve missed the boat. I don’t mind, but I would really value your opinions.

Thanks in advance for your trouble.

Lesley

P55 isn't the correct form - this is a defined benefit scheme you're talking about, and the P55 relates to defined contribution schemes.

The very good news is that because you were entitled to payment of your civil service pension at age 60, even though you received all the back payments in one lump sum and were taxed as if you'd received the whole lot in the same tax year, you can ask to have payments taxed on the year in which your entitlement arose. I'd start by writing to HMRC and simply say you would like the arrears to be spread back in accordance with the guidance given in HMRC's manual. They will probably come back and ask you for some more information (how much per year is the most likely), at which point you ask your scheme to give you the breakdown if they've not done so already.

It'll probably do your head in even further to read the following, but I've included it for completeness/for anyone else who'd be interested - you don't need to read it before contacting HMRC!

https://www.gov.uk/hmrc-internal-manuals/self-assessment-manual/sam121160

Dear Marcon thanks, and: [I think I'm not manipulating the reply function very well - bear with me!]
P55 - I did wonder.
I telephoned myCSP, and also the HMRC, and both said "you can claim back your tax using the P55" but when I actually completed it, it doesn't seem to relate to my current circumstances.
I have a "final contribution" scheme - I'm certain of that.
Is final contribution different to defined benefit and defined contribution? You seem to be saying it is - and here is the root of a lot of my problems, this is a complicated area!
So, I've got the P55 done. I will telephone HMRC tomorrow and tell them that, and also read them a letter I will write using your information. I'll get myCSP to provide the breakdown now as they are not very quick at this sort of thing (to get the p55 information from them I had to start copying in my MP - how stupid to have to go to this effort).
Your link - insomnia rules, I'll read it tonight.
Lesley

Form P55 has no relevance to your scheme, which is a defined benefit (aka final salary - no such thing as a 'final contribuiton') scheme.

I really wouldn't telephone HMRC; there's no point. Just follow the suggestions above and ensure you have the breakdown from MYCSP of year by year payments and send HMRC that. 

lesleyfromkent

Marcon said:

lesleyfromkent said:

Marcon said:

lesleyfromkent said:

I have a final salary pension scheme from working in the civil service.

I am 66 – and could have taken this when I turned 60 in 2018. I did not take it for physical and mental health reasons, and a spectacularly nasty divorce.

I left it “laying on”, it was/is about £8,000 gross pa. Not a huge amount, but still, worth having.

I have activated that civil service Pension now, at the point where I just hit state pension age, and I can work the computer without panic attacks that are too big.

I seem to have paid a huge amount of tax (over £15,000) and in addition my wages (from working 2 days at Waitrose as a cashier) have dropped from £700 pm to £370pm as they seem to think I am a higher-rate tax payer – so, the forms I am filling in (P55, plus I’m doing a self-assessment but it looks like I don’t need to) don’t seem to take into account that I was a long way below the income tax thresh-hold between 2018 and now (always been minimum wage plus £1 or so). Am I able to ask for this to be taken into account? Or have I just got to suck it up and pay Higher Tax on it all now until 5 April 2025?

The actual amounts were: (checked with HMRC today as I am getting very confused):

• A gross payment of £38,000 which, with £15,495 tax taken off at source, gave me a payment of £22,454 which shows on my bank statement. This seems to be the 5 years x £8k pa “lying on”.

• The 25% tax free cashed in of £40,256, which shows on the bank statement as that amount.

I am having difficulty getting my head around what I need to do to get back any tax I may be entitled to. I think I should pay an accountant, but this is the last money I have. To be used on making my home live-able in for my old age. I seem to be paying from my current wages as if I, on minimum wage + 50p currently, am a legitimate higher rate tax-payer!

Please be kind – I have a constellation of health problems and bad bad brain fog. I tried asking the civil service pension people for help and got multitudes of complicated emails which I couldn’t understand. So I gave up, cashed it in, and activated the rest. I am happy to live with the consequences of my actions, but I do need to do whatever is correct with HMRC.

Really, I only need to know if I’m doing the correct form (P55) which doesn’t seem to have anywhere to put in that I could have taken this in 2018 -or if I’ve missed the boat. I don’t mind, but I would really value your opinions.

Thanks in advance for your trouble.

Lesley

P55 isn't the correct form - this is a defined benefit scheme you're talking about, and the P55 relates to defined contribution schemes.

The very good news is that because you were entitled to payment of your civil service pension at age 60, even though you received all the back payments in one lump sum and were taxed as if you'd received the whole lot in the same tax year, you can ask to have payments taxed on the year in which your entitlement arose. I'd start by writing to HMRC and simply say you would like the arrears to be spread back in accordance with the guidance given in HMRC's manual. They will probably come back and ask you for some more information (how much per year is the most likely), at which point you ask your scheme to give you the breakdown if they've not done so already.

It'll probably do your head in even further to read the following, but I've included it for completeness/for anyone else who'd be interested - you don't need to read it before contacting HMRC!

https://www.gov.uk/hmrc-internal-manuals/self-assessment-manual/sam121160

Dear Marcon thanks, and: [I think I'm not manipulating the reply function very well - bear with me!]
P55 - I did wonder.
I telephoned myCSP, and also the HMRC, and both said "you can claim back your tax using the P55" but when I actually completed it, it doesn't seem to relate to my current circumstances.
I have a "final contribution" scheme - I'm certain of that.
Is final contribution different to defined benefit and defined contribution? You seem to be saying it is - and here is the root of a lot of my problems, this is a complicated area!
So, I've got the P55 done. I will telephone HMRC tomorrow and tell them that, and also read them a letter I will write using your information. I'll get myCSP to provide the breakdown now as they are not very quick at this sort of thing (to get the p55 information from them I had to start copying in my MP - how stupid to have to go to this effort).
Your link - insomnia rules, I'll read it tonight.
Lesley

Form P55 has no relevance to your scheme, which is a defined benefit (aka final salary - no such thing as a 'final contribuiton') scheme.

I really wouldn't telephone HMRC; there's no point. Just follow the suggestions above and ensure you have the breakdown from MYCSP of year by year payments and send HMRC that. 

My mistake - final salary was the word I wanted. 
OK re the P55 - because I can see that the questions don't relate to my circumstances, so thanks to you all for that.

But do I need a "breakdown" from myCSP? I've just nearly finished the letter to HMRC and because its the same amount month after month, no change - and myCSP wrote in the only letter I have from them (I'll include a copy) that there would be no changes unless my tax situation changed, the annual rate changed or my or other deductions (none of this will apply) then the only change could have been that I opted for a different amount of "cash in". So I propose to write to them and will mention that if they need the breakdown I can get it from myCSP.

Anyway, I will write to HMRC and ask myCSP at the same time for the breakdown. And hopefully it will all end quickly and happily.
Ta very very much
Lesley.

lesleyfromkent

squirrelpie said:

Do you know anybody locally (a friend or relative maybe or citizen's advice or similar) who could sit with you whilst you try to access the government gateway? A second pair of eyes can be very helpful, even if they're not experts.

Also, I think you may find it easier to deal with your tax over time if you ask HMRC to assign the BR tax code to your pension and the variable one to your employment.

dear squirrelpie
Thanks for the thought. I'm not going there - it was a long marriage and the difficulties he left me with, well, I'll take them to my grave. You might be interested in how this went - I used to be good with computers and IT. I'm also left handed. I had 3 kids and a long parental leave and everything changed at work so I retired. However at home the [now ex] hubbie decided he had hand strain from using a mouse so he changed it to a pen. He's right handed, I'm left handed. For the last 10 years of our marriage this effectively meant I could not use the computer at all. Yup I could have had "my own mouse" but the hassle would have been so bad I could not do it. So, that's how you keep somebody off the computer. And he did all the tax returns without anything from me. 

BR tax code / variable one: don't know about this, but will ask hmrc about it when next speaking to them.
thanks for the thought though, appreciated.
Lesley

lesleyfromkent

FIREDreamer said:

lesleyfromkent said:

Just finishing up for the evening - thanks again to you all. 
I have been looking at the string, and although I tried to reply to each of you, I do wonder if I have made a total dog's breakfast of it. 
Well, thanks again. I shall toast you all this evening, and post later with how it all turned out.
Getting old can be a pain, but supportive places like this make it easier.
regards
Lesley

66 isn’t old - it’s the new 46! 😀

FIREDreamer said:

lesleyfromkent said:

Just finishing up for the evening - thanks again to you all. 
I have been looking at the string, and although I tried to reply to each of you, I do wonder if I have made a total dog's breakfast of it. 
Well, thanks again. I shall toast you all this evening, and post later with how it all turned out.
Getting old can be a pain, but supportive places like this make it easier.
regards
Lesley

66 isn’t old - it’s the new 46! 😀

I shall be sure to remember that, thanks.
I'd like to add an emoji but can't see how to!.
regards
Lesley

Marcon

lesleyfromkent said:

Marcon said:

lesleyfromkent said:

Marcon said:

lesleyfromkent said:

I have a final salary pension scheme from working in the civil service.

I am 66 – and could have taken this when I turned 60 in 2018. I did not take it for physical and mental health reasons, and a spectacularly nasty divorce.

I left it “laying on”, it was/is about £8,000 gross pa. Not a huge amount, but still, worth having.

I have activated that civil service Pension now, at the point where I just hit state pension age, and I can work the computer without panic attacks that are too big.

I seem to have paid a huge amount of tax (over £15,000) and in addition my wages (from working 2 days at Waitrose as a cashier) have dropped from £700 pm to £370pm as they seem to think I am a higher-rate tax payer – so, the forms I am filling in (P55, plus I’m doing a self-assessment but it looks like I don’t need to) don’t seem to take into account that I was a long way below the income tax thresh-hold between 2018 and now (always been minimum wage plus £1 or so). Am I able to ask for this to be taken into account? Or have I just got to suck it up and pay Higher Tax on it all now until 5 April 2025?

The actual amounts were: (checked with HMRC today as I am getting very confused):

• A gross payment of £38,000 which, with £15,495 tax taken off at source, gave me a payment of £22,454 which shows on my bank statement. This seems to be the 5 years x £8k pa “lying on”.

• The 25% tax free cashed in of £40,256, which shows on the bank statement as that amount.

I am having difficulty getting my head around what I need to do to get back any tax I may be entitled to. I think I should pay an accountant, but this is the last money I have. To be used on making my home live-able in for my old age. I seem to be paying from my current wages as if I, on minimum wage + 50p currently, am a legitimate higher rate tax-payer!

Please be kind – I have a constellation of health problems and bad bad brain fog. I tried asking the civil service pension people for help and got multitudes of complicated emails which I couldn’t understand. So I gave up, cashed it in, and activated the rest. I am happy to live with the consequences of my actions, but I do need to do whatever is correct with HMRC.

Really, I only need to know if I’m doing the correct form (P55) which doesn’t seem to have anywhere to put in that I could have taken this in 2018 -or if I’ve missed the boat. I don’t mind, but I would really value your opinions.

Thanks in advance for your trouble.

Lesley

P55 isn't the correct form - this is a defined benefit scheme you're talking about, and the P55 relates to defined contribution schemes.

The very good news is that because you were entitled to payment of your civil service pension at age 60, even though you received all the back payments in one lump sum and were taxed as if you'd received the whole lot in the same tax year, you can ask to have payments taxed on the year in which your entitlement arose. I'd start by writing to HMRC and simply say you would like the arrears to be spread back in accordance with the guidance given in HMRC's manual. They will probably come back and ask you for some more information (how much per year is the most likely), at which point you ask your scheme to give you the breakdown if they've not done so already.

It'll probably do your head in even further to read the following, but I've included it for completeness/for anyone else who'd be interested - you don't need to read it before contacting HMRC!

https://www.gov.uk/hmrc-internal-manuals/self-assessment-manual/sam121160

Dear Marcon thanks, and: [I think I'm not manipulating the reply function very well - bear with me!]
P55 - I did wonder.
I telephoned myCSP, and also the HMRC, and both said "you can claim back your tax using the P55" but when I actually completed it, it doesn't seem to relate to my current circumstances.
I have a "final contribution" scheme - I'm certain of that.
Is final contribution different to defined benefit and defined contribution? You seem to be saying it is - and here is the root of a lot of my problems, this is a complicated area!
So, I've got the P55 done. I will telephone HMRC tomorrow and tell them that, and also read them a letter I will write using your information. I'll get myCSP to provide the breakdown now as they are not very quick at this sort of thing (to get the p55 information from them I had to start copying in my MP - how stupid to have to go to this effort).
Your link - insomnia rules, I'll read it tonight.
Lesley

Form P55 has no relevance to your scheme, which is a defined benefit (aka final salary - no such thing as a 'final contribuiton') scheme.

I really wouldn't telephone HMRC; there's no point. Just follow the suggestions above and ensure you have the breakdown from MYCSP of year by year payments and send HMRC that. 

My mistake - final salary was the word I wanted. 
OK re the P55 - because I can see that the questions don't relate to my circumstances, so thanks to you all for that.

But do I need a "breakdown" from myCSP? I've just nearly finished the letter to HMRC and because its the same amount month after month, no change - and myCSP wrote in the only letter I have from them (I'll include a copy) that there would be no changes unless my tax situation changed, the annual rate changed or my or other deductions (none of this will apply) then the only change could have been that I opted for a different amount of "cash in". So I propose to write to them and will mention that if they need the breakdown I can get it from myCSP.

Anyway, I will write to HMRC and ask myCSP at the same time for the breakdown. And hopefully it will all end quickly and happily.
Ta very very much
Lesley.

Yes, you do. Your month on month pension payments might be the same now, but in earlier years they will have been lower - there will have been annual inflation-related pension increases applied. Wait until you have that from myCSP, and then write to HMRC, who won't be able to act until they have the breakdown. There's no point writing and asking HMRC if they will need this; they will!

lesleyfromkent

Thanks. I wrote when you put this up, nothing yet received.

Marcon

lesleyfromkent said:

Thanks. I wrote when you put this up, nothing yet received.

Nearly four months...no surprise I fear, but extremely unwelcome for you.

I'd chase now, especially if don't have any form of confirmation that your original request was actually received and is 'in the queue' for action.

If nothing has happened in another four weeks, try a formal complaint: https://www.civilservicepensionscheme.org.uk/about-us/complaints/internal-dispute-resolution-idr/