Employer declaring pension contribution incorrectly to HMRC.

Beaumont176

Good evening,

Looking for some advice. As above my employer is declaring my Tax contributions to HMRC as a "Net pay arrangement" which would mean that my pension contribution is removed from my Gross salary and then taxes applied.
However, i have compared my salary against the HMRC income tax calculator and i can see clearly that my Pension contribution is being removed from my NET Pay. This is then subject to the highest rate of tax. This method is known as relief at source. 

Because my employer is declaring it to HMRC as NET Pay arrangement and not Relief at source HMRC will not let me claim back the additional tax relief as a high rate tax payer.

A work colleague has been arguing this case for 4 years now and our Employer has not made any adjustment. As you can imagine it is a considerable amount of money. 

Where do we stand legally with this issue?

Nomunnofun1

Can you confirm if there is a difference, and what that is, between your gross pay and your gross taxable pay? 

Beaumont176

Nomunnofun1 said:

Can you confirm if there is a difference, and what that is, between your gross pay and your gross taxable pay? 

There is no difference between my Gross pay and Goss taxable its the exact same figure.

 When i put my income into the tax calculator my "HMRC calculated" take home pay minus my pension contribution is exactly my take home pay according to my wage slip.

TheSpectator

Beaumont176 said:

Good evening,

Looking for some advice. As above my employer is declaring my Tax contributions to HMRC as a "Net pay arrangement" which would mean that my pension contribution is removed from my Gross salary and then taxes applied.
However, i have compared my salary against the HMRC income tax calculator and i can see clearly that my Pension contribution is being removed from my NET Pay. This is then subject to the highest rate of tax. This method is known as relief at source. 

Because my employer is declaring it to HMRC as NET Pay arrangement and not Relief at source HMRC will not let me claim back the additional tax relief as a high rate tax payer.

A work colleague has been arguing this case for 4 years now and our Employer has not made any adjustment. As you can imagine it is a considerable amount of money. 

Where do we stand legally with this issue?

So, what makes you think it's been reported to HMRC as net pay? To report it as net pay it would show a difference between gross and taxable pay. Is it a DB or DC scheme? If a DC scheme do you have access to the pension providers account for you so that you can see what it says about contributions received?

Beaumont176

TheSpectator said:

Beaumont176 said:

Good evening,

Looking for some advice. As above my employer is declaring my Tax contributions to HMRC as a "Net pay arrangement" which would mean that my pension contribution is removed from my Gross salary and then taxes applied.
However, i have compared my salary against the HMRC income tax calculator and i can see clearly that my Pension contribution is being removed from my NET Pay. This is then subject to the highest rate of tax. This method is known as relief at source. 

Because my employer is declaring it to HMRC as NET Pay arrangement and not Relief at source HMRC will not let me claim back the additional tax relief as a high rate tax payer.

A work colleague has been arguing this case for 4 years now and our Employer has not made any adjustment. As you can imagine it is a considerable amount of money. 

Where do we stand legally with this issue?

So, what makes you think it's been reported to HMRC as net pay? To report it as net pay it would show a difference between gross and taxable pay. Is it a DB or DC scheme? If a DC scheme do you have access to the pension providers account for you so that you can see what it says about contributions received?

I'm not sure what your post is contributing to the solution, regardless I will answer anyway.

I can access the pension and see all payments made and that only the basic % of tax relief has been applied. 

I know it has been declared as Net Pay because HMRC have confirmed this and I can see on my payslip that my Pension contribution is after taxes and not before.

The issue is for whatever reason my employer will not correct the method that they are using to declare the pension contribution to HMRC. This means employees are losing out on additional tax relief as a high rate tax payer.

TheSpectator

Beaumont176 said:

TheSpectator said:

Beaumont176 said:

Good evening,

Looking for some advice. As above my employer is declaring my Tax contributions to HMRC as a "Net pay arrangement" which would mean that my pension contribution is removed from my Gross salary and then taxes applied.
However, i have compared my salary against the HMRC income tax calculator and i can see clearly that my Pension contribution is being removed from my NET Pay. This is then subject to the highest rate of tax. This method is known as relief at source. 

Because my employer is declaring it to HMRC as NET Pay arrangement and not Relief at source HMRC will not let me claim back the additional tax relief as a high rate tax payer.

A work colleague has been arguing this case for 4 years now and our Employer has not made any adjustment. As you can imagine it is a considerable amount of money. 

Where do we stand legally with this issue?

So, what makes you think it's been reported to HMRC as net pay? To report it as net pay it would show a difference between gross and taxable pay. Is it a DB or DC scheme? If a DC scheme do you have access to the pension providers account for you so that you can see what it says about contributions received?

I'm not sure what your post is contributing to the solution, regardless I will answer anyway.

I can access the pension and see all payments made and that only the basic % of tax relief has been applied. 

I know it has been declared as Net Pay because HMRC have confirmed this and I can see on my payslip that my Pension contribution is after taxes and not before.

The issue is for whatever reason my employer will not correct the method that they are using to declare the pension contribution to HMRC. This means employees are losing out on additional tax relief as a high rate tax payer.

If it was net pay then you wouldn't have basic rate relief added by the pension provider so on what basis are HMRC denying HR relief.?

I suspect the person you have spoken to at HMRC have misunderstood. If you send in the evidence that your gross and taxable are the same and that basic rate relief has been added then that should be enough.

Failing that ask to complete a Tax Return, probably the quickest and easiest way.

Beaumont176

TheSpectator said:

Beaumont176 said:

TheSpectator said:

Beaumont176 said:

Good evening,

Looking for some advice. As above my employer is declaring my Tax contributions to HMRC as a "Net pay arrangement" which would mean that my pension contribution is removed from my Gross salary and then taxes applied.
However, i have compared my salary against the HMRC income tax calculator and i can see clearly that my Pension contribution is being removed from my NET Pay. This is then subject to the highest rate of tax. This method is known as relief at source. 

Because my employer is declaring it to HMRC as NET Pay arrangement and not Relief at source HMRC will not let me claim back the additional tax relief as a high rate tax payer.

A work colleague has been arguing this case for 4 years now and our Employer has not made any adjustment. As you can imagine it is a considerable amount of money. 

Where do we stand legally with this issue?

So, what makes you think it's been reported to HMRC as net pay? To report it as net pay it would show a difference between gross and taxable pay. Is it a DB or DC scheme? If a DC scheme do you have access to the pension providers account for you so that you can see what it says about contributions received?

I'm not sure what your post is contributing to the solution, regardless I will answer anyway.

I can access the pension and see all payments made and that only the basic % of tax relief has been applied. 

I know it has been declared as Net Pay because HMRC have confirmed this and I can see on my payslip that my Pension contribution is after taxes and not before.

The issue is for whatever reason my employer will not correct the method that they are using to declare the pension contribution to HMRC. This means employees are losing out on additional tax relief as a high rate tax payer.

If it was net pay then you wouldn't have basic rate relief added by the pension provider so on what basis are HMRC denying HR relief.?

I suspect the person you have spoken to at HMRC have misunderstood. If you send in the evidence that your gross and taxable are the same and that basic rate relief has been added then that should be enough.

Failing that ask to complete a Tax Return, probably the quickest and easiest way.

They are denying tax relief because as per a "Net Pay arrangement" my Pension contribution should be deducted from my Gross Salary to give a Gross taxable figure. Giving me Tax relief on my salary. (How my company is declaring it to HMRC)

(In real life) My Gross Salary and Gross taxable salary is the same figure. So I am being taxed accross my full Salary. Then they remove my pension contribution which has just recieved 45% tax. (This is relief at source)

In HMRCs eyes i am not due any tax relief because my company are telling them that I have had the relief already acrross my Gross wage which is incorrect.

Both methods are fine but my company and HMRC need to be aligned as to which method is being used. 

I would like to know why my company are reluctant to declare this to HMRC. My company are refusing to reply to emails hence where I would like to know where I stand with legal action.

TheSpectator

Beaumont176 said:

TheSpectator said:

Beaumont176 said:

TheSpectator said:

Beaumont176 said:

Good evening,

Looking for some advice. As above my employer is declaring my Tax contributions to HMRC as a "Net pay arrangement" which would mean that my pension contribution is removed from my Gross salary and then taxes applied.
However, i have compared my salary against the HMRC income tax calculator and i can see clearly that my Pension contribution is being removed from my NET Pay. This is then subject to the highest rate of tax. This method is known as relief at source. 

Because my employer is declaring it to HMRC as NET Pay arrangement and not Relief at source HMRC will not let me claim back the additional tax relief as a high rate tax payer.

A work colleague has been arguing this case for 4 years now and our Employer has not made any adjustment. As you can imagine it is a considerable amount of money. 

Where do we stand legally with this issue?

So, what makes you think it's been reported to HMRC as net pay? To report it as net pay it would show a difference between gross and taxable pay. Is it a DB or DC scheme? If a DC scheme do you have access to the pension providers account for you so that you can see what it says about contributions received?

I'm not sure what your post is contributing to the solution, regardless I will answer anyway.

I can access the pension and see all payments made and that only the basic % of tax relief has been applied. 

I know it has been declared as Net Pay because HMRC have confirmed this and I can see on my payslip that my Pension contribution is after taxes and not before.

The issue is for whatever reason my employer will not correct the method that they are using to declare the pension contribution to HMRC. This means employees are losing out on additional tax relief as a high rate tax payer.

If it was net pay then you wouldn't have basic rate relief added by the pension provider so on what basis are HMRC denying HR relief.?

I suspect the person you have spoken to at HMRC have misunderstood. If you send in the evidence that your gross and taxable are the same and that basic rate relief has been added then that should be enough.

Failing that ask to complete a Tax Return, probably the quickest and easiest way.

They are denying tax relief because as per a "Net Pay arrangement" my Pension contribution should be deducted from my Gross Salary to give a Gross taxable figure. Giving me Tax relief on my salary. (How my company is declaring it to HMRC)

(In real life) My Gross Salary and Gross taxable salary is the same figure. So I am being taxed accross my full Salary. Then they remove my pension contribution which has just recieved 45% tax. (This is relief at source)

In HMRCs eyes i am not due any tax relief because my company are telling them that I have had the relief already acrross my Gross wage which is incorrect.

Both methods are fine but my company and HMRC need to be aligned as to which method is being used. 

I would like to know why my company are reluctant to declare this to HMRC. My company are refusing to reply to emails hence where I would like to know where I stand with legal action.

But the evidence you have is clear it's not net pay, so not sure why HMRC are not giving relief.

Do you know who the company accountants are? Possibly contact them?

Beaumont176

TheSpectator said:

Beaumont176 said:

TheSpectator said:

Beaumont176 said:

TheSpectator said:

Beaumont176 said:

Good evening,

Looking for some advice. As above my employer is declaring my Tax contributions to HMRC as a "Net pay arrangement" which would mean that my pension contribution is removed from my Gross salary and then taxes applied.
However, i have compared my salary against the HMRC income tax calculator and i can see clearly that my Pension contribution is being removed from my NET Pay. This is then subject to the highest rate of tax. This method is known as relief at source. 

Because my employer is declaring it to HMRC as NET Pay arrangement and not Relief at source HMRC will not let me claim back the additional tax relief as a high rate tax payer.

A work colleague has been arguing this case for 4 years now and our Employer has not made any adjustment. As you can imagine it is a considerable amount of money. 

Where do we stand legally with this issue?

So, what makes you think it's been reported to HMRC as net pay? To report it as net pay it would show a difference between gross and taxable pay. Is it a DB or DC scheme? If a DC scheme do you have access to the pension providers account for you so that you can see what it says about contributions received?

I'm not sure what your post is contributing to the solution, regardless I will answer anyway.

I can access the pension and see all payments made and that only the basic % of tax relief has been applied. 

I know it has been declared as Net Pay because HMRC have confirmed this and I can see on my payslip that my Pension contribution is after taxes and not before.

The issue is for whatever reason my employer will not correct the method that they are using to declare the pension contribution to HMRC. This means employees are losing out on additional tax relief as a high rate tax payer.

If it was net pay then you wouldn't have basic rate relief added by the pension provider so on what basis are HMRC denying HR relief.?

I suspect the person you have spoken to at HMRC have misunderstood. If you send in the evidence that your gross and taxable are the same and that basic rate relief has been added then that should be enough.

Failing that ask to complete a Tax Return, probably the quickest and easiest way.

They are denying tax relief because as per a "Net Pay arrangement" my Pension contribution should be deducted from my Gross Salary to give a Gross taxable figure. Giving me Tax relief on my salary. (How my company is declaring it to HMRC)

(In real life) My Gross Salary and Gross taxable salary is the same figure. So I am being taxed accross my full Salary. Then they remove my pension contribution which has just recieved 45% tax. (This is relief at source)

In HMRCs eyes i am not due any tax relief because my company are telling them that I have had the relief already acrross my Gross wage which is incorrect.

Both methods are fine but my company and HMRC need to be aligned as to which method is being used. 

I would like to know why my company are reluctant to declare this to HMRC. My company are refusing to reply to emails hence where I would like to know where I stand with legal action.

But the evidence you have is clear it's not net pay, so not sure why HMRC are not giving relief.

Do you know who the company accountants are? Possibly contact them?

Yes exactly! It is completely clear in black and white there is an issue. It's thousands of pounds over many years. 

HMRC have stated that only my employer can change the status and when they do they can back date payments.

We have contacted Payroll but the issue has been ongoing for 4 years with no solution.

I came here for advice to escalate to the next level.

 

uknick

OP, is your company big enough to employ a proper payroll section?  I ask because I'm staggered a payroll section, whose job it is to do this correctly, have been unable to correct it for over 4 years.

Plus, as every higher rate taxpayer in your company, including the bosses, will be suffering I'm surprised pressure hasn't been bought to bear to make them get it right.
 

DRS1

Find out who at your employer is responsible for doing the reporting to HMRC and take them out to lunch.