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Tax rebates withheld becuse of DR Settlement

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    Tax rebates withheld becuse of DR Settlement

    I stopped contracting in 2010, closed the Ltd Co & took up perm PAYE employment completing all SA's & paying all taxes due & only claiming the usual pension contributions, mileage & gift aid etc.

    For the last 4 years I have transferred £10k pa from ISA to SIPP & gained the 25% in SIPP tax rebates & then claimed the 20% SA rebate vs my relevant PAYE income - that’s generated a fund to pay my DR settlement & a 3rd pension for later. I am very lucky to be able to do that.

    But HMRC Stopped refunding me PAYE SA tax refunds 4 years ago when the settlement thing started & retained the funds due to me, & yes i did formally ask them for it back. But Nope.

    Q 1 - What legislation allows them to do that?
    Q 2 - What +interest will they apply & is it compounded?

    Had they refunded me the ~£2k PAYE rebate each tax year, I would have put that in the SIPP too! that generates a further £500pa in SIPP rebate pa & a further PAYE SA £400 pa rebate the tax year after. All vs relevant income.

    The value to me of that vs HMRC + interest is much greater & then because of age, I could have taken the 25% lump sum to pay HMRC & had a SIPP pension on ice / drawdown too & a sum to go back in the ISA.

    £10k over 4-5 tax years & recycling the PAYE rebate would have generated a fund of ~£60k allowing me to draw down c£15k which is more than my settlement. All that is not including fund growth over the last 4 years that has hugely outweighed any bank or Gov interest rates! ~8% vs 0.5%! (C19 effects on market inc)

    With HMRC retaining those tax rebates I have lost about £3200 in legitimate tax rebates & not accounting for any fund growth.

    Q 3 - Does anyone think I can claim the value of those rebates from HMRC?

    All they have said they will do is offset the tax withheld vs settlement & then send me the bill for any balance.

    (Nb this post could be in either HMRC scheme enquiries or accounting forums?)

    Thanks all & good luck with this latest phase of the DR mess.

    #2
    Originally posted by Hitchphil View Post
    ... when the settlement thing started & retained the funds due to me...
    Not sure you'll get the answers you want, as your post is worded in such a way that you've already decided.

    How much do you owe HMRC in settlement?
    Have you an agreement to settle in place with them?

    You say the funds are "due to you", but you're also implying that you have payments "due to HMRC". Is this correct?
    …Maybe we ain’t that young anymore

    Comment


      #3
      1. section 59B TMA 1970

      2. Repayment supplement is around 0.5% and not compounded

      3. Nope.
      Best Forum Adviser & Forum Personality of the Year 2018.

      (No, me neither).

      Comment

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