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Backdated DB pension could cost me 45% if I get paid in one go
TerryBiscuits
Posts: 17
Forumite
Hi everyone, I'm not sure whether this should have been in cutting tax or pensions because it's a bit of both, but hopefully someone can help here.
Following a four year dispute with my former employer and the pension fund authority, the Pension Ombudsman got involved and have now confirmed that I should have received my unreduced pension from February 2021. If the amount owed is paid to me in one go, it will push me into the 45% tax bracket for this year, whereas I was actually in the 20% bracket for 21-22 and 22-23, and 40% for 23-24 and 24-25. Would I be able to reclaim the tax for those years if I let HMRC know how much I should have received each year?
Following a four year dispute with my former employer and the pension fund authority, the Pension Ombudsman got involved and have now confirmed that I should have received my unreduced pension from February 2021. If the amount owed is paid to me in one go, it will push me into the 45% tax bracket for this year, whereas I was actually in the 20% bracket for 21-22 and 22-23, and 40% for 23-24 and 24-25. Would I be able to reclaim the tax for those years if I let HMRC know how much I should have received each year?
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Comments
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You need to get the pension provider to supply a breakdown of how much applies to each year and present that to HMRC and they will recalculate the tax due accordingly. https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye70023
Never associate with idiots on their own level, because, being an intelligent man, you'll try to deal with them on their level - and on their level they'll beat you every time.
Being hated by idiots is the price you pay for not being one of them.
Jean Cocteau 1889-1963
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That's fantastic - thanks!0
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