Public Service Pension Remedy/McCloud Judgement RSS Back Payment - Declaration on SATR

I will be receiving a back payment under the McCloud Judgement of my public Service Pension in three parts: A. A correction to my tax free lump sum B. Back payment to correct underpaid pension C. Interest on the back payment. Parts B and C are being taxed at my marginal rate before payment to me (equivalent to a D0 tax code). Do I need to declare any part of this payment on my SATR?

Hi,

Yes. you need to declare it and send details of the years the backdated pay relates to if you wish it to be allocated to the correct years. As the payment has not yet been made, this will not be declared until the 2024 to 2025 tax return.

Thank you.

How will this be treated if this retrospective action makes my past adjusted net income increase past the threshold for High Income Child Benefit Charge or past the threshold for abatement of the personal allowance?

Hi,
If the judgement awards an increase, which is paid in a single tax year, that applies to previous tax years; you will need to write to:
H.M. Revenue and Customs Self Assessment
BX9 1AS.  
Your letter should include details and evidence of the award, broken down for each tax year it applies to.  
HMRC can work out how much tax was payable in those earlier tax years and apply this upon request, where it is to your advantage.
Thank you.