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I received my annual service pension review from the Paymaster General's office today and whilst the gross pension rose a little I see they've more than doubled the amount of tax being taken,so that now I'm receiving a net monthly payment £55.00 less than last year.Does this affect all ex-servicemen?
I have, and a young lady informed me it was.
Maybe it's sting in Brown's idea of how Service personnel and ex-Service personnel should be treated.
There is a known problem with HMRC issuing the wrong tax codes for people on PAYE ( approx 12 million wrong in fact) . It mainly affected people with more than one source of income or who had recently changed jobs.
So if you have a forces pension and any other income or pension you could be one of those affected.
There is no valid reason, unless your income has increased or you have underpaid in a previous year, for your tax to increase by that amount monthly
Your notice of coding should show you how your code is made up. Check the HMRC website to see what your allowance should be ( they vary with age ) then make sure that amount is given in your coding , if not get on to them again
It doesn't seem to be just service pensions, its any private pension as the increase in the state pension has lowered your tax coding due to there being no increases in tax free allowance in the budget.
Seems there may be some peril in filling a tax return. Just make absolutely certain you have got everything correct the first time.
If you have an Age Concern Office local, then ask to see one of their advisor's, they will soon find out the facts for you.
I know on my pensions I was paying to much, and eventually obtained a back-dated tax refund. Since then everything seems to have run smoothly.
Except this year, when I was informed that the government was going to give me a slight increase, and my other pensions, due to Retail Prices Index were unable to provide an increase for 2010/11.
canarieslover-- An increase of £55 per month equates to an increase in pay/ pension of £275 per month for a basic rate taxpayer, I don't think pensions have gone up that much.
To be honest nobody on the forum can advice you if you are paying to much tax or the reason why !!
Tax is complicated enough as it is !!! there are so many things that can effect what tax you pay
If you have underpaid in previous years and your tax code has been adjusted
Any benefits you may be claiming
Any income received from other sources
Your age would effect the amount you can earn before paying tax
If under 65 I believe you can earn £6,475 before paying tax
You need to check your tax code which has been sent as a notice of coding I suggest you contact your tax office again as sometimes there information can be a iffy
AS has been said, do look at your "Notice of coding". I have a small Dutch OAP and found that the IR had allowed double the amount (last year and this year's) income from that source so have given me too low a tax code - the details are on the notice of coding. I will get less in April from my pension provider, and am waiting for a new code - they admitted computer errors.
" The revenue has a duty to make sure you pay the correct tax - no less, no more."
A pity then , that in spite of me filling in a tax return every year, They mistakenly have assumed more UK OAP than I get (in spite of having access to the OAP database) and also have estimated my "foreign" pension twice - one at this years level and have added last years, even though I was taxed on it last year. They agreed on the phone they were wrong, blaming the computer. In the past they have made other errors such as multiplying rather than dividing exchange rates etc. This year they are making more errors than usual, so you have to watch their calculations carefully.
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