Income tax error, pension provider at fault.

Discussion in 'General Chat' started by gibbsy, Apr 19, 2016.

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  1. gibbsy

    gibbsy
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    I had a letter from my pension provider stating that they had been paying 'an element' of my firefighters pension as tax free, an injury allowance, dating back to 2007. The FFP is complex but all injury allowances are legally tax free. At the moment the provider will not elaborate and is in discussion as to how much I will have to pay. It could be over £2k. I know I am up to date on the normal side of my pension so it must be somewhere in the injury element. They say it only came to light as I am approaching 65 which brings about a slight change.

    If the revenue say they want the tax can I make a full claim against the provider for a nine year cock up. I know there is a provision to ask HMRC to do just that.
     
  2. the whistler

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    I would think that it is up to you to inform the tax people about all your income. They then advise your pension provider how much to tax you via your tax code. so it's difficult to see how your pension provider can be held to blame.
     
  3. gibbsy

    gibbsy
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    On my pension monthly advice it shows a figure under basic pension. On which tax has always been paid. The second figure is shown as injury allowance, which is tax free and HMRC were so advised by the provider. No need for me to question. Now it seems that a part of that should have been added to the basic pension since 2007 and not the tax free element. The pension is so complicated it's almost impossible to understand unless you're the expert. It seems the provider has cocked up big time. Their fault.
     
  4. EarthRod

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    @gibbsy

    Seems to me your firefighters pension and associated injury allowance needs to be unravelled so you understand it.

    I assume the pension provider operates across all firefighters and is therefore generic and other firefighters have an injury allowance. Because of this could your trade union help in this matter? Why I ask is because other firefighters probably have the same 'cock-up' in their tax affairs and this needs to be brought out into the open.
     
  5. gibbsy

    gibbsy
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    I've been in touch with the FBU. I am getting to the bottom of it. There was a change to my normal pension that reflected my loss of ability to 'earn to the same level' because of my injury. It resulted in a small rise to the pension. However, who ever altered the paperwork in 2007 put in the tax free portion of the pension, not the main taxable section. Human error that has only recently been picked up, which they have admitted. It is now up to HMRC to sort it out as the pension provider will not fight if HMRC decide to collect the unpaid directly from them and not me.

    This is the third time in five years that my pension has been totally f***** up by the same department. Roll on the end of May when everything should become easier as I pass 65.
     
  6. Trollslayer

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    I started taking a pension early and the provider informs the Inland Revenue automatically (I checked). It is paid gross so I know I will be getting the right tax bill at the end of the year.
     

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