SIPP transfer resulting in tax code change

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82169297#Comment_82169297

Dazed is probably right that you just have two things going on at the same time and there is no connection.

One thing you could try is logging on to the new pension's website and looking to see what it shows - eg does it show a contribution in the relevant year. Or does a tax rebate appear in the list of incoming payments.

Otherwise maybe you need to go back to tax years when you were contributing to see if somehow you weren't getting higher rate tax relief then. So they are trying to make it up now.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/82169714#Comment_82169714

Although HMRC never give pension tax relief for one tax year in the tax code for a different tax year.

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82169725#Comment_82169725

Sorry I thought you had suggested checking older tax returns to find out where the figure in this tax code came from.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/82169732#Comment_82169732

Yes, as in it has been used as an estimate for later tax years and has continued to be rolled forward as an estimate.

As mentioned here,

https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye130025

DRS1

Interesting. I am used to a previous year's figure (eg of savings interest) being carried over into next year. It looks as if the pension contribution allowance can be carried over into next year as well. I may have misread the note on that page but it sounds as if HMRC need to key in something to make sure the carry forward does not go on for more than one year. This implies it could have been going on for past years as well - years when the OP was contributing nothing. But this allowance just appeared this year. It seems odd that it would lie dormant for a few years and then just rear its head now. Then again I have had personal experience of HMRC saying we have stopped that, you should not get anything next year and then I get it next year. I foresee a call to HMRC in the OP's future.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/82169758#Comment_82169758

Maybe this is the first tax year for a while where HMRC have estimated some higher rate tax relief will be due i.e. the info has been there in previous tax years but it hasn't had a material impact?

HawkE

I looked into my Personal Tax Account as suggested by @Dazed_and_C0nfused to find an entry for the Personal Pension Relief many months backs, well before the SIPP transfer. The date did not relate to any contribution (I had made none) nor any tax submission or information I supplied (again there were none remotely close to the date of entry of PPR).

Called HMRC and it was indeed info carried forward from a prior year a few years back and is just an estimate for tax coding purposes. Since the annual self-assessment process means it all gets corrected it could have just stayed but I'd have ended up underpaying tax now and then upon self assessment having a bigger bill, so HMRC just removed the relief while I was on the call.

Thank you all for your replies.

eskbanker

I'd have ended up underpaying tax now and then upon self assessment having a bigger bill

AKA receiving an interest-free loan from HMRC!