Letter from the tax man saying I owe more tax...

[Doshusallie]

They are saying that they have checked a tax return I submitted for fy 10-11. And an ex-employer are saying they paid me a lump sum from their pension scheme of over £2k, which I haven't declared so I owe £500 odd quid plus more for late payment fees.

I don't recall ever getting a lump sum, or requesting one. And if I had requested a lump sum payment if it was for the balance of my pension fund with that employer it would be about £30k not £2k. And can you even do that? Request a pension payment in a lump sum???

Have got an email address to contact ex-employer but can any one advise?

Tia

Sounds very strange.... although timings wise they are catching up on 10-11 queries recently so the fact you are hearing about it now doesn't surprise me.

Pension thing is odd - I would check that you haven't claimed via your SA accidentally for a pension which is benefited at source directly to the pension co. That is a usual error, much more likely than some weird lump sum (is that even allowed ) at a random time.

What does SA mean?

OK,
you need to get out your old P60's and P11ds
if you have not kept them slap yourself on the wrist contact the former employer as they WILL have copies

Did you pull your pension contributions back out of their fund when you left?
In which case you have to pay back the tax you were allowed on those earnings

Did you do a self assessment return in any of the years?
If not, then you would be able to argue against the penalties but not the bill and interest

if you did do a return you just have to grovel and do a good sob story and pay up ASAP

I do have all my p60s and p11ds.

I did not consciously pull any pension contributions back when I left. I just assumed in leaving those contributions would stop.

I have had to do a self assessment for the last 4ish years. But as I do not think I have recieved any pension payments, as I am not claiming a pension, I have never declared any pension income....

Really appreciate your help..this stuff scares and confuses me....

Dosh SA = self assessment (tax return)

Talkin OP mentioned in post that she received a letter from HMRC saying they have checked her return for 10-11, so I assume she did! Pension errors on return are quite common ime. Question is quite ambiguous in its wording iirc.

Ipanema
you are right but the little dears at HMRC are great at talking about returns when there were none

Dosh
Well done on keeping all your stuff.
Your best bet will be to check the numbers you have and write to HMRC asking for MUCH more detailed clarification of exactly what they are accusing you of.
I had one of these that turned out to be a fishing trip so admit nothing till they clarify

Yes, agree with you there talkin! Useless shower of shite...

OP, I was meaning that you may have accidentally (easily done) claimed for tax relief on your pension payments where there was no relief due.

Or something like that.

AS talkin said, get all details clarified and come and ask again if necessary

Thanks so much guys. Have in front of me my p60 and my p11d for the year in question so will use them for any discussions to be had.

I don't think I have claimed tax relief for pension, wouldn't know how to!

What a ball ache.

Thanks again.

the tax return asks you to say how much you have contributed to a pension. If you do that, they work it out for you. It matters most if you are not basic rate.

but if the pensions contribs were deducted from your pay by the employer, they will not have been taxed, so no tax relief is due.

I never put pension contributions on my tax return.....

if the pensions contribs were deducted from your pay by the employer, then you probably don't need to. Can't remember now, I don't have such a scheme. Sorry if I got it wrong. If you have a copy of the form to hand, it will probably say.

Ok, do you also have a copy of the 10-11 return?

If not, ask them to send you a copy and you'll have everything you could possibly need at hand to then discuss it

This could well be an error on Hmrc's part and forewarned is forearmed and all that!

I don't think so but will check.

Thanks again all, mums net rocks. Xx

I suspect that it's a refund of your pension contributions by your former employer. Often, you have to stay in the scheme for a minimum period, e.g. two years, in order to retain benefits and if you leave before then you just get your own pension contributions returned to you. However, because you've had tax relief at source on your contributions, you then have to pay the tax.

As others have recommended, check your copy of your 2010/11 return. If you hadn't put anything in the pensions section, it's most likely that your former employer has told HMRC that it repaid your pension contributions to you gross.

BTW, HMRC do not bother with 'fishing trips' for relatively small amounts like this.

When did you submit the return? HMRC only has a certain timeframe to start asking questions.

Finance princess - I left the company in 2006. I had been in that pension scheme for 7 years.

I'm pretty sure I wouldn't have entered any amount for pension in the tax return, as, as far as I am aware, I have not had any pension payments.

And they could not have paid it to me in my gross salary in that year because I was not working for them during the period in question....??

Thanks for your help.

Lucid, they recieved it in January 2012...

If they had repaid my pension contributions to me gross, how would they have done that? Would it not show as a credit on my bank statement during that period? Wouldn't I remember an amount like that suddenly arriving in my bank account from an employer I hadn't worked for for 6 years? Wouldn't they have to contact me to let me know they had made a payment to me and why?

If you left in 2006, it would be abnormal to receive a payment subsequently. And you should have been notified of it unless they did not know your new address. Ask the pension managers for a statement covering transactions since you left.

However, I did once receive a spontaneous payment to my pension plan due to mis-selling by a crook "adviser" who misled me into making a change which resulted in charges to me and commission to him, the company made the payment without me having initiated a complaint. I did get a letter about it afterwards.