Their Mistake - My Pocket

ctm_2

If the amount is over £2.5k, then they might agree to collect it through your code over more than one year, so each year is less, if you ask nicely, but this is in no way guaranteed. Your best bet is to figure out yourself what the amount will be (we can help if you provide the relevant details) so you can figure out what HMRC will say, and so you know how to reply.

If it is over £2.5k, then they only option really is paying it off in one go, or being made to complete Self Assessment returns for the years in question so HMRC can then properly chase you for the money.

Codes can be changed mid year, but an underpayment cannot be included in a code mid-year. It has to be there from the beginning of the year.

taxdoctor

Hi Fallen

In my opinion I think you might be OK, what usually happens is that you are only given tax relief at source for the basic rate of 22%.

As you are a higher rate tax payer you are able to obtain tax relief at 40% so hopefully HMRC have only adjusted your tax code to take into account the difference. As most pensions contributions are now made net of basic rate tax I'd be surprised if the Revenue have got it wrong.

It's definitely worth checking with them to see how the land lies.

Hope that helps!

System

My worry about your case fallen121 is that, as I said in my original post, the P810 was sent to you because of something you may have put on a tax return in the years that you did have to fill one in.

If you look at question 14 on the 2002-2003 tax return for example:-

http://www.hmrc.gov.uk/pdfs/2002_03/tax_return/sa100.pdf

you will see that it specifically tells you - "Do not include contributions deducted from your pay by your employer to their pension scheme or associated AVC scheme, because tax relief is given automatically. But do include your contributions to personal pension schemes and Free-Standing AVC schemes."

That would therefore indicate to me that there might also be an enquiry into those tax returns. However in most cases those PAYE staff who deal with your tax affairs now would not automatically check previous years tax returns as they are not trained in Self Assessment.

jem16

taxdoctor wrote: »

Hi Fallen

In my opinion I think you might be OK, what usually happens is that you are only given tax relief at source for the basic rate of 22%.

As you are a higher rate tax payer you are able to obtain tax relief at 40% so hopefully HMRC have only adjusted your tax code to take into account the difference. As most pensions contributions are now made net of basic rate tax I'd be surprised if the Revenue have got it wrong.

It's definitely worth checking with them to see how the land lies.

Hope that helps!

Company pension contributions are almost always taken from gross pay before tax so full tax relief is given at source.

The OP was not entitled to any more relief so it's no use giving false hope.

fallen121

Pam17 wrote: »

My worry about your case fallen121 is that, as I said in my original post, the P810 was sent to you because of something you may have put on a tax return in the years that you did have to fill one in.

The pension tax relief I was awarded was as a direct result of the P810 return, I did not previously claim any pension related relief.

The only other relief I have claimed has been for Professional Contributions. This was supported by documentation which I can probably dig out again if there is a subsequent investigation. I am still claiming this relief and am entitled to it. I keep the documentation because the rate of subscription changes periodically - and yes, membership of this body is a requirement of my employment. When the rate changes I send a copy of the invoice with a covering letter and the PAYE is adjusted accordingly.

In the 1990's I claimed a uniform allowance. I stopped claiming this when I was outsourced to a company in the same industry where a uniform was not required, and I informed the Revenue of this. But I continued to claim the Professional subscription because I was still required to maintain membership as part of my job.

It is possible that the P810 was sent to me in the first place because a salary increase bought me into to 40% bracket for the first time. The main focus of the P810 was to check up on the amount of savings interest I was receving, which I think at the time was about £125 per annum. Obviously the Revenue has to adjust for the difference between the basic rate tax already being deducted by the Bank and the 40% rate I should be paying and as that was the first year I became liable at 40% they would have had to do this for the first time.

Even now I don't always have to complete a SA return because in general my tax affairs are considered to be uninteresting as they don't change very much. The Revenue even wrote to me advising that they didn't consider it necessary for me to complete a SA return each year unless my circumstances changed! Apart from my salary and investments which are almost always in tax exempt vehicles such as ISAs, my income doesn't really fluctuate. Based on the sums I recieve in interest it's literally just a few pounds a year.

I fully expect that despite my fairly uninteresting tax affairs, it'll be back to annual SA for me as a result of this little debacle! :rolleyes:

fallen121

Pam17 wrote: »

If you look at question 14 on the 2002-2003 tax return for example:-

http://www.hmrc.gov.uk/pdfs/2002_03/tax_return/sa100.pdf

you will see that it specifically tells you - "Do not include contributions deducted from your pay by your employer to their pension scheme or associated AVC scheme, because tax relief is given automatically. But do include your contributions to personal pension schemes and Free-Standing AVC schemes."

Thanks for this.

How hard would it have been to include this note with the guidance notes to the P810? Would have saved me a LOT of grief!

fallen121

taxdoctor wrote: »

....what usually happens is that you are only given tax relief at source for the basic rate of 22%.....

A surprising number of people have told me the same thing. But as I now know as a result of the steep learning curve I've been experiencing this week, this obviously refers only to private schemes, not to company schemes where it's taken from gross pay before tax so full tax relief is given at source.

There's obviously a HUGE amount of confusion about this. I considered myself to be fairly intelligent, but I got caught out big time. There's a lesson in this somewhere.

System

fallen121 wrote: »

I fully expect that despite my fairly uninteresting tax affairs, it'll be back to annual SA for me as a result of this little debacle! :rolleyes:

That might be the case but once you submit your first return which has nothing complicated or out of the ordinary on it then you will probably be deselected for tax returns again.