Me and the Tax Office

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Joined
30 Mar 2008
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146
Good Evening to one and all.

On the 21st of each month I get a company pension and have done for the past ten years with no problem. This morning whilst checking my bank account I found £460 missing from my payment. On checking with my pension office they told me that it was the Tax Office and to contact them. I contacted them and they admitted to me that they had made a big mistake. What caused it was I started my Government pension in July but their system charged me back-tax to April on both pensions instead of charging me from July. I was never informed of this change either by letter, e-mail or telephone call. It took me most of the morning and early afternoon to try and sort this out. What they have now told me is the money will be paid back in the next couple of months which is no good to me as its their mistake . To me this is theft by the Inland Revenue as I was never informed that they would be taking the amount from my account until I got a statement from my Pension Company late this afternoon. I was also told by the Revenue that there computer system could not handle the changes required to refund my monies. My local MP will now deal with this on Mon as I got a phone call from his office and they will help me. I turned 65 at the beginning of July hence my Government Pension which I had to fight for as well even though they had my documents since March. I am willing to pay whatever tax I have to but £460 is a lot. It took me 7 phone calls between my Pension People and the Inland Revenue from early this morning. I can handle this but if I was in debt what would happen so please check everything you get from a Government Office.
 
I am not looking for sympathy but to warn other people what is happening and if something is wrong with a Government Dept fight until you get what is owed it would be different on the other foot and they would not be long in removing from your account if you owed them. Thanks for reading.
 
I am approaching that date in October. I currently take a company pension and have done since age 60. I pay tax on that as I am still working. I will probably stay working and defer the state pension maybe a year.

However I am not looking forward to the huge change in tax status from full time working with a pension to a full time pensioner with two or three income streams however small in comparison. They are bound to mess it up.

Sorry for your issues though.
 
Some government departments are a law unto themselves. It took me 4 years to get the DWP to repay £5250 they wrongly deducted from benifits because of mistaken identity. As for an apology? Don't be silly. My local MP (labour) was not the slightest bit interested fortunately living in Scotland I sort help from my local MSP (SNP) who was absolutely fantastic and was not in the least hit intimidated by the DWP rather dubious tactics to cover up their mistake.

Why these departments can legally take so long to repay monies due has always been a puzzle to me especially as they seem to be able to remove money from your account pretty much instantly.
 
it does seem that IT systems in the public sector are particularly bad - the student loans company and parts of the NHS seem to suffer from this too
 
Typical tax office. Quick to take, slow to repay.

Reminds me. I get a discount on council tax.

About a month ago I got a notice my discount is being cancelled and they are claiming back all discount I had since April.

They're wrong to cancel it but I need to make my case again.

I'm told I have 2 weeks to contest it and I send my reply the same day I get the notice.

I check up on it and I'm told it will take at least 4 weeks for the council department to look at it.

In a nutshell they were going to screw me out of the money whatever happened and now I need to argue for it back.

Some funny guys running the council round here.
 
Hello, Many thanks for your replies and I know that there is people out there worse off than me and I will get through this but I now have no confidence with any Government Department and will fight for my rights. I could claim benefits but I never will infact that is the first question I'm asked when I contact them "Are you on benefits" and as always my reply is "No" surely they must have a file on their computer about me which would let them know if I was. Anyway less about me. Nkata you should get a letter from the Pension People that you are due your State Pension and you will have to apply for it. I downloaded the forms from their site and with my documents I sent them in Mar but still they did not get it right and I had a few phone calls to them even no word when I passed 65, I have now sorted that problem. Your state pension should not be taxed but your company pension will be hit ie: before my State pension kicked in my tax bill on my company pension was £34 a month but my new tax bill when this is sorted will shoot up to £109 a month due to the fact I will be over the threshold and as I have said before I do not mind paying tax. So I always said that my State Pension each month will cover my tax. Another thing when I retired I phoned the Tax Office and enquired about the National Insurance stamp as to whether I still pay it and was told as I had paid over 30 years that was enough well in the last couple of years the Government raised it to 35years and in my Pension letter i was informed that I could make up two years of stamps but will not be taking up their offer. Hope this little bit helps you nkata.
 
Some government departments are a law unto themselves. It took me 4 years to get the DWP to repay £5250 they wrongly deducted from benifits because of mistaken identity. As for an apology? Don't be silly. My local MP (labour) was not the slightest bit interested fortunately living in Scotland I sort help from my local MSP (SNP) who was absolutely fantastic and was not in the least hit intimidated by the DWP rather dubious tactics to cover up their mistake.

Why these departments can legally take so long to repay monies due has always been a puzzle to me especially as they seem to be able to remove money from your account pretty much instantly.
I sent my MP an e-mail about the crap from the Tax Office and within 30 mins his office contacted me and after I answered a few questions they are delighted to take up my case and like you not intimidated by the Tax People and guess which party? SNP.
 
Isn't this the same as when you change jobs, most of the time you start paying emergency tax in the 1st few months then you get it all back, I don't think it's classed as theft however you want to word it.

You will have to pay more tax though as state pension and company pension are classed as 2 incomes, my mother wanted to get a part time job job but due to the fact that her company pension is classed as a 2nd income job the job she looked at (10 hours a week in a bookies) effectively meant she was working for tax as they would take all her money off her.
 
What I'm saying is the tax will come of the Company pension for both pensions as the State Pension should be tax free. The Tax Office removed £460 from my account without telling me by letter, phone call or e-mail and that in my eyes is theft, they have admitted they mucked up big style and why should I pay for their mistakes. £460 is a lot of money to loose in one go espically when you are a pensioner.
 
You will have to pay more tax though as state pension and company pension are classed as 2 incomes, my mother wanted to get a part time job job but due to the fact that her company pension is classed as a 2nd income job the job she looked at (10 hours a week in a bookies) effectively meant she was working for tax as they would take all her money off her.

that sounds very dubious and confused - why does it matter whether the income comes from 2 sources or one? I'm also a bit skeptical about someone having a marginal tax rate of 100% simply for working in a part time job while collecting a pension - that also sounds like nonsense... the highest margins rate we have AFAIK is 60% when you get above 100k per year and start losing your personal allowance
 
What I'm saying is the tax will come of the Company pension for both pensions as the State Pension should be tax free. The Tax Office removed £460 from my account without telling me by letter, phone call or e-mail and that in my eyes is theft, they have admitted they mucked up big style and why should I pay for their mistakes. £460 is a lot of money to loose in one go espically when you are a pensioner.

You have a personal allowance of £11,500 per year - if your income is less than that from all sources, then you pay no tax.

If your only income is the State Pension then you will pay no tax.

If you have a company pension + state pension and it goes over the £11, 500 you will pay the standard rate of income tax the on amount over £11,500. It really doesn't matter if you split the tax over the State Pension and the Company pension or just use the State pension to pay the tax or just use the Company pension to pay the tax. The net result is you pay the tax that you're legally obliged to pay. If you want to you can ring the Tax office and get them to deduct all of the tax from your company pension - then as you say, your State pension will be paid 'tax free'

As for Theft of the Money - you need to look up the legal definition of Theft. I can assure you it isn't.

The Tax Office does make mistakes, I retired in June, I ended up with an emergency tax code. For some strange reason the tax computers thought that I was still in receipt of my wages and also now in receipt of my pension. I rang them and actually spent longer listening to their voicemail system than I did to the person who sorted out my problem. Took 10 minutes to sort. Tax code restored to normal. She realised what had happened to cause the issue, sorted it all out and placed my personal taxation onto my 'company' pension. They were very good to be honest.
 
The rate pensioners pay is the same as any other age group except you stop paying NI. I will get about £7.5k state, £12k company 1 and £3k company 2. I will expect to have to fill in a tax return when I retire to tell them about my pension as otherwise, they will **** it up (currently on higher rate). So approx £22.5k with an 11k tax allowance means 20% payable on £11.5k or about £2.3k per annum tax, by my calculation. Any other part time work is taxed the same until you hit the higher tax band, unlikely in my case.
 
The rate pensioners pay is the same as any other age group except you stop paying NI. I will get about £7.5k state, £12k company 1 and £3k company 2. I will expect to have to fill in a tax return when I retire to tell them about my pension as otherwise, they will **** it up (currently on higher rate). So approx £22.5k with an 11k tax allowance means 20% payable on £11.5k or about £2.3k per annum tax, by my calculation. Any other part time work is taxed the same until you hit the higher tax band, unlikely in my case.

Out of interest, at what stage do you stop paying NI now?
Do you stop at STAT 68 on PAYE and self employed earnings? Do you not pay NI on any actual pension income?

Wondering this as with many, many people who will have a split pension, some coming at 60 and some at 68, the age 60 pensionable earnings, is that exempt of NI, or only when you reach STAT?
 
Out of interest, at what stage do you stop paying NI now?
Do you stop at STAT 68 on PAYE and self employed earnings? Do you not pay NI on any actual pension income?

Wondering this as with many, many people who will have a split pension, some coming at 60 and some at 68, the age 60 pensionable earnings, is that exempt of NI, or only when you reach STAT?

https://www.gov.uk/national-insurance/overview
 
No, since it isn't income from work. You only pay NI if your employed by someone and earn more than £157 per week or if you are self employed and make a profit of more than £6025 per year.

I retired just over a month ago, aged 49. Income is now from a Police pension, which is taxable due to being over the personal allowance. I suppose technically at the moment I'm unemployed but I'm not claiming any benefits. I also pay no NI contributions, since I'm not working.

At the present moment I have 32 qualifying years for the State pension, therefore a shortfall of 3 years (you need 35 years to qualify for a full state pension) so my intention is at some time over the next few years to pay Class 3 voluntary contributions for the missing 3 years. Which will be around £2200 at current rates.

It is a bit of a no brainer to pay the contributions due to the fact that at the present time I've a forcast from HM Government of £119 per week (based on 32 yrs NI contributions) compaired to 159 per week (based on 35 years NI contributions). Difference per year is £1906, so for an outlay of just over £2k I'll end up with an additional £1906 per year for life.
 
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