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Tax / pension / arrears payment

2 replies

Blingu · 30/08/2024 14:33

Just trying to help a friend and wondering if this can be resolved. She was paid pension in arrears. The payment was in this tax year but the time it was earned spanned 10months of the previous tax year.
The tax is taken off paye style. She has repeatedly contacted the pension scheme provider but they literally don’t reply. Ever. On the phone you can’t speak to specialists.

She has asked if this award can be allocated to the correct years. the tax people have said the pension people can sort it but they won’t! Can it be sorted with tax directly or in any other way?

thanks

OP posts:
DeclutteringNewbie · 30/08/2024 14:41

This doesn’t make sense.

Assume payment made by employer? if they paid it to the pension company there would be no tax deduction. If they paid it to her in lieu of pension then it’s taxable. She can recover the tax by paying it into the pension where the tax relief will be added back.

Blingu · 30/08/2024 15:35

Think I have failed to explain clearly.
She has her pension now, and it was paid from the end of March. It now comes monthly. In her first payment there was also arrears for 11 months so the date of most of these payments should have put them in the 2023-2024 tax year. Instead they have been taxed as income for the current tax year which means as she now gets her pension she is paying lots of tax on the arrears that she wouldn’t have paid had it been allocated to 2023-24. It’s all sorted through the pension scheme and taxed before she gets it.

The scheme haven’t reallocated it and won’t as far as we can tell and the tax people say it’s the scheme’s responsibility.

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