Tuesday, September 16, 2014

HMRC (Her Majesty's Revenue and Customs) - A shower of sh(!)t ?

I retired at the end of March this year. My actual retirement date was end August 2013 but I chose to work on for another seven months. My pensions became due at end August 2013 so they became active too.
My salary from my employer was already over the threshold for the basic rate of tax so any additional income i.e. pensions would be liable for tax at the rate of 40%. Anybody with an ounce of intelligence that is employed should be aware of rates of tax, but it appears not so the very people who administer public taxes who we entrust to look after our tax affairs.
Over the past couple days I received a letter from HMRC telling me I had underpaid tax by £2017 during the tax year 2013/14. How did that occur? My employer provided all the information concerning my income and benefits to HMRC and my P11D was correct. My pension providers are required by law to inform HMRC when they commence paying me my pensions, which I know they did because they were deducting me tax from my monthly income.
I have double checked the HMRC statement and their calculations are correct concerning income and PAYE deducted, so if they had this information where did it go wrong? How could I possibly underpay my tax as I do not personally deduct it from my income, only receive the net amount after tax deductions  have already been made.
My employer and Pension Providers deduct the tax they are told to when issued with a tax coding from HMRC. Oh dear me, is it possible that HMRC did not issue the correct tax coding's? According to their statement and my P11D they had all my income and benefits information so how difficult was it to issue the correct tax codes on my retirement date. In fact, it was very simple indeed: 
 As I was still employed and my salary had already exceeded the standard rate of tax any additional income i.e. pensions would be taxed at 40%. Simple? You would have thought so! Instead now I have a black hole in my pension income and there is nothing I can do about it even though it was not me who created it. AND it's not good enough to just say "well you had the money" because I was completely unaware that I was not entitled to it!
So, was there an apology from HMRC for causing this problem?  Well no. It was just a standard letter, worded in a matter of fact way telling me I don't have to do anything about the deficit as they will just deduct it from my pensions.
Oh, excuse me . . . has anyone bothered to check that I can actually afford for £180 per month to be deducted from my pension? Well of course not. 
Just to give you an idea how on the ball they are, during the first six weeks of my retirement they unbelievably sent me a tax coding amendment at the rate of about one per week.

At this rate I may well have to ditch my retirement and find some employment. What a load of wankers. GRRRRRRR.


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