Paying Tax on backdated Pension Income

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Dear Forum Members,

Does anyone know the answers to the following questions?

I was widowed in October 2009 and due to the fact that I had lodged various complaints with the FSA against my late husband's private pension provider regarding their maladministration (complaints upheld), the pension payments due were not paid until various times throughout tax year 2012/2013.

1) Because the pension payments were for periods from October 2009 onwards and would have been paid in those previous tax years if the PPP had done their job correctly, how do I go about informing HMRC about this situation, and claim that portion of my tax allowance for 2009/2010 which was unused against the relevant pro-rata payments made in tax year 2012/13? Is this allowed? It would be unfortunate that I have to pay more tax because of the incompetence of the PPP.

2) Because I have 2 children, and was only in receipt of Widowed Parents Allowance and 2 other small company widow pensions from October 2009 onwards up until this back payments were made, I claimed Tax Credits for those previous years based on my Income as was at the time.

Now that I have received these back payments, how do I go about being honest and truthful with HMRC Tax Credit Office and update them regarding the backdated income for tax years 2009/10, 2010/11 and 2011/12?

I do not want to be in the position where the late payments from the PPP are classed as income for tax year 202/2013, because this is not the correct case. Part of the payments are for previous tax years.

Has anyone else been in this situation, or has the relevant tax knowledge to point me in the right direction?

Comments

  • xylophone
    xylophone Posts: 44,478 Forumite
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    Now that I have received these back payments, how do I go about being honest and truthful with HMRC Tax Credit Office and update them regarding the backdated income for tax years 2009/10, 2010/11 and 2011/12?

    You write to HMRC, give full details of your situation and await their advice?

    https://www.gov.uk/contact-the-tax-credit-office
  • jimmo
    jimmo Posts: 2,282 Forumite
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    For Income Tax you will need to write to HMRC giving them a schedule showing the amounts attributable to each tax year. A copy of your pension provider’s figures would be ideal.

    http://www.hmrc.gov.uk/manuals/eimanual/EIM74103.htm


    I know nothing about tax credits but I would suggest you send separate letters to the Tax Office and the Tax Credits Office.
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