Me and the Tax Office

[b0rn2sk8]

You don't pay NI on the pension. You pay NI on employment income up to state pension age.

EDIT:

OP why don't you sign up to one of their tax accounts so you can see what is exactly going on with your income.

If you have underpaid which is what I think you are suggesting it should be able to be recovered over the year by changing (lowering) your tax code. That is fairly standard practice for such a small amount.

But if you have already paid it then id imagine that you would just continue to now pay at the normal rate through PAYE.

 

[Destination]

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.

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.

Thx v clear, was what I was thinking, wanted to be sure.

 

[Andy90]

Must admit if you've got any queries, ring the Tax or State Pension people, they're pretty used to it and to be honest in the dealings I've had with them they've been brilliant.

 

[Psycho Sonny]

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.

lmao - clueless people spouting rubbish as per usual.

HMRC only just got the powers to take money from peoples banks 2-3 years ago. they very rarely use it though as it has so many rules attached to it, it's easier to go down other routes.

they can however signal to your income stream to deduct x amount. which is different from taking money straight from your account

 

[Psycho Sonny]

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.

Your at the mercy of who you get on the end of the phone. If you didn't get a successful outcome first time around try again and again.

Basically pay in the public sector and within certain government departments has been stagnant for 20-30 years. in fact for the past 7 years they have been effectively been getting wages cut year on year and that is to continue.

So all the good staff are leaving. Pay peanuts and get monkeys. If you want to sort out the real problem tell your MP they need to lift the public sector pay freeze and have an independent body review the wages. the longer this goes on the worse it will be for you all

 

[Jock7]

My Local MP (SNP) was in touch with me on Fri afternoon and will take my case up but as it was the weekend it will be left till today, the main thing is at the moment I can carry the shortfall but I will be very wary of any Government Dept I deal with.

 

[Sandycheeks]

Not pension related but....
Years ago I was claiming Child Tax Credits and had to jump through the yearly hoops of paperwork.
A few years passed then I got a letter stating that I had been over-payed and that the amount would be deducted from the following years award.
At the end of that year I got another letter stating that I had been over-payed by around £3000 over the years and that I had to apply for Tax Credits so they could award it to me and then deduct the full amount back. All of this despite me giving in all of the paperwork that was requested including wage slips etc...
I have no faith in any of these government departments and never will.

Sorry for the slight derail but I watched 'I Daniel Blake' over the weekend so this is all a bit raw again.

 

[Psycho Sonny]

Not pension related but....
Years ago I was claiming Child Tax Credits and had to jump through the yearly hoops of paperwork.
A few years passed then I got a letter stating that I had been over-payed and that the amount would be deducted from the following years award.
At the end of that year I got another letter stating that I had been over-payed by around £3000 over the years and that I had to apply for Tax Credits so they could award it to me and then deduct the full amount back. All of this despite me giving in all of the paperwork that was requested including wage slips etc...
I have no faith in any of these government departments and never will.

Sorry for the slight derail but I watched 'I Daniel Blake' over the weekend so this is all a bit raw again.

you should have researched how it worked better.

if someone is giving you free money then you would think you would at least spend some time researching that your doing it right

 

[Sandycheeks]

you should have researched how it worked better.

if someone is giving you free money then you would think you would at least spend some time researching that your doing it right

I did, that's kind of my point. I did everything they asked and still got shafted at the end because they cocked it up somehow.

 

[Psycho Sonny]

I did, that's kind of my point. I did everything they asked and still got shafted at the end because they cocked it up somehow.

no they didn't. the system is automatic. it's based on the information it's fed.

your HH income or circumstances must have changed and you forgot to mention it until the end of the year. pro tip. ALWAYS OVERESTIMATE YOUR INCOME FOR TAX CREDITS.

if you earn £15K. say that you earn £17K. you won't lose out on any money at the end of the year when you tell them your P60 salary you will get everything due to you in a lump sum. the opposite happened in your case. you earned more than you said you would. therefore you owe them money. did you do overtime, or get a bonus, etc, or your partner? or did childcare costs change? could have been anything but the mistake was on your end

 

[Evo8]

Basically pay in the public sector and within certain government departments has been stagnant for 20-30 years. in fact for the past 7 years they have been effectively been getting wages cut year on year and that is to continue.

Who told you this? I just got quite a significant pay rise.

I used to work for HMRC, it's the computer fault, not a mistake by an actual person. Also, if you've paid too much tax, it's refunded to you in full when your pension provider or employer applies your revised tax code.

 

[Jock7]

Evo8 thanks for your input. At no time did I blame the persons I was dealing with and knew it is the computer system, I did not pay too much tax they took £460 from my account without warning and admitted the computer was wrong but it cannot refund the money that was taken. This was caused by my State Pension which started in July but the Inland Revenue mucked up and back taxed both my pensions to April this year. If I make a mistake I sort it why can't the Inland Revenue?. The computer systems in just about all Government Depts were done on the cheap and as per the media its well known and now the systems cannot cope. By the way its going to take two months or more for me to get my money refunded through tax codes.

 

[Psycho Sonny]

Who told you this? I just got quite a significant pay rise.

I used to work for HMRC, it's the computer fault, not a mistake by an actual person. Also, if you've paid too much tax, it's refunded to you in full when your pension provider or employer applies your revised tax code.

ermm it's been the topic of conversation by the government for the past month or so.

you may have seen it on the front of every newspaper?

significant pay rise? you clearly don't work in the 1% pay restricted public sector or as it was 7 years ago 0% pay restricted (pay freeze).

so spill the beans i take it your an MP or a senior director? they aren't affected by the pay cap at all. i think ours for 10% pay rise this year. whereas everyone underneath got 1%

 

[Psycho Sonny]

Evo8 thanks for your input. At no time did I blame the persons I was dealing with and knew it is the computer system, I did not pay too much tax they took £460 from my account without warning and admitted the computer was wrong but it cannot refund the money that was taken. This was caused by my State Pension which started in July but the Inland Revenue mucked up and back taxed both my pensions to April this year. If I make a mistake I sort it why can't the Inland Revenue?. The computer systems in just about all Government Depts were done on the cheap and as per the media its well known and now the systems cannot cope. By the way its going to take two months or more for me to get my money refunded through tax codes.

they can't just hit a magic button. you will get the money back through future tax cuts on your income streams.

basically you will pay less tax now for the rest of the year to compensate, or at the end of the year get a rebate or both. you will get everything your entitled to. next year you won't have the same issues as the system will now know you have more than 1 or several income streams.

 

[Evo8]

so spill the beans i take it your an MP or a senior director? they aren't affected by the pay cap at all. i think ours for 10% pay rise this year. whereas everyone underneath got 1%

Nope, I'm an EO for the DWP.

 

[Evo8]

basically you will pay less tax now for the rest of the year to compensate, or at the end of the year get a rebate or both. you will get everything your entitled to. next year you won't have the same issues as the system will now know you have more than 1 or several income streams.

This is true if he has asked for it to be cumulative.

 

[b0rn2sk8]

Nope, I'm an EO for the DWP.

I don't work at the DWP but this is what I understand the deal was:

Folks at the DWP got the option to re-contract under much worse T&C's in exchange for a modest pay rise over a few years.

Most would have had to sign up to work evening and weekends instead of office hours, lost 1.5 days annual leave, less sick pay and a few other bits and bobs.

I wouldn't call it an annual pay rise...

Those that didn't re-contract can expect 0.1% pay rises going forward to force peoples hand.

 

[Destination]

Nope, I'm an EO for the DWP.

This is a slightly sideways to the topic, but as you work for DWP you may have some incite.
I have some NHS pension contributions within the 1995 scheme, and when I contacted the pensions folks for an 'illustration of benefits' I got a reply along the lines of
'The information on record shows that at 31/03/2016 the accrued benefits for you amount to:
A pension of £xx pa and a lump of y, this is calculated on service of z years.
This is an estimate of the value of your pension at 31/03/2016, based on the above service, your earnings to 31/03/2015 and your benefits are not being claimed before normal retirement age.

Now the 2015 inclusion is due to the 1995 scheme ending then.
Any contributions after will be into the 2015 scheme and be treated separately.

My question is should I expect this 'value' to increase each year, in relation to some combination of inflation (CPI I think), until it reaches the normal retirement age, at which time it can be claimed?
So next year f.ex it'll be £xx plus 1.5% or similar, and so on and so forth?

 

[Psycho Sonny]

This is a slightly sideways to the topic, but as you work for DWP you may have some incite.
I have some NHS pension contributions within the 1995 scheme, and when I contacted the pensions folks for an 'illustration of benefits' I got a reply along the lines of
'The information on record shows that at 31/03/2016 the accrued benefits for you amount to:
A pension of £xx pa and a lump of y, this is calculated on service of z years.
This is an estimate of the value of your pension at 31/03/2016, based on the above service, your earnings to 31/03/2015 and your benefits are not being claimed before normal retirement age.

Now the 2015 inclusion is due to the 1995 scheme ending then.
Any contributions after will be into the 2015 scheme and be treated separately.

My question is should I expect this 'value' to increase each year, in relation to some combination of inflation (CPI I think), until it reaches the normal retirement age, at which time it can be claimed?
So next year f.ex it'll be £xx plus 1.5% or similar, and so on and so forth?

it depends on the scheme you were on. if it was a 1995 scheme then it's likely to be a decent one, all the new ones are a lot worse. so it may increase a little. you need to look into the schemes details

 

[Destination]

it depends on the scheme you were on. if it was a 1995 scheme then it's likely to be a decent one, all the new ones are a lot worse. so it may increase a little. you need to look into the schemes details

This doesn't help. I have looked at the schemes details, thus why I asked someone who worked for DWP in case they have any internal incite.
It is a very intricate process, as in my particular situation, I am still making contributions to that scheme (as I bought added years when one could), as a practitioner based scheme as it was the 1995 NHS scheme for us was always career average, and never final salary.
The pension I will receive will be split into two pieces one at age 60 the other at my normalised stat retirement age, which just went up to 68.
I know the new scheme creates a little pot each year worth 1/54 and this pot increases each year by CPI+1.5%. So in 20 years time, you will have 20 years worth of pots, some will have increased by 20 levels of CPI+1.5%, one by 19, one by 18 etc.

What I am trying to determine is if I get an analysis done of my old scheme each year, should I expect a similar function to be persisting across the level of it entirely, plus some additional effect for the small component of added years I am continuing to purchase? If so, is this increase still a CPI+1.5% or a different value. Nowhere within the practitioner services for 1995 scheme can I find this information. There is something to suggest the pension tracks inflation after it has been taken, but I can't find information relating to what it does prior to being taken.

It is a hard question to phrase, and I hope I've made sense.