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  • RE: Pension lump sum payment

    The helpline staff tried to "zero" out the PAYE estimate, but it always pops up again. These very recent and somewhat unlikely income estimates may stem from an AI system, trying a little too hard to find income. To try and explore in detail what the IR have on record, I applied for a SAR but it only resulted in a SAR Rejection notice. Fortunately, the Taxation Charity for Old People recognised my problem as a common one; caused by not sending the P45 for the lump sum. They had many similar cases where compound interest was added every month for years as the lump sum payment appeared as isolated income and not part of a pension commutation. Also, The persistence of these unlikely income tax estimates might suggest that the IR think fraud has occurred. To assist me, the pension company's admin team sent me a letter to pass on to the Inland Revenue explaining the calculations in detail (and that they paid the tax). I sent the pension administrator's letter, to the HMRC yesterday.
  • RE: Pension lump sum payment

    I have recently received a letter from the pension provider that paid me the lump sum in 2010. It explains how the cash sum was calculated, which appears to differ from the 2010 P45 "total pay". Also notes I added to my 2010 Tax return about the lump cash sum appear not to have been recorded in my official IR record for that tax year. I have sent the P45 now, and it has been worked on, I'll now send the recent explanatory letter from Rothersay. With luck this should clear the incorrect tax estimate from my account. One thing puzzles me though, why are P45's, normally for employment, used to process Trivial cash sums? Surely, a better way is needed, that might also avoid confusing a pension company with their administrator - in this case, a separate company.
  • RE: Pension lump sum payment

    I took a lump sum from a private pension in 2010. I declared the payment on my 2010 return but didn't send in the P45 the pension company sent me to HMRC. That has been rectified now. However, new this year on my Income Tax estimate is a 5 figure income estimate attributed to fictitious employment with the pensions company's administration company! The P45 has been processed now, but the confusion between the pension company and it's administrator remain - as does the large tax estimate - at least on my account. HMRC advisors insist that I will not be asked to pay this income tax estimate but it seems it can't be removed from my account. Why is this? Are tax estimates only done once year? (An estimate on income tax from a disused PAYE account has also appeared this tax year - and again advisors tell me this can be ignored as I wont have to pay anything (I retired in 2017). Is this the fault of a new AI computer or a new policy aimed at clearing up legacy tax claims? I thought there was a 4 year limit anyway. Maybe I need to declare some actual earnings to replace the old estimates.