HMRC has admitted that it has made a number of mathematical errors in its official guidance on pension tax legislation, after Aries Pension & Insurance Systems pointed it out.
Unfortunately it cannot immediately correct the mistakes.
HMRC’s registered pension schemes manual, which was published in March, contains at least three errors in relation to how much someone can expect to take in tax-free benefits when they are invested in more than one scheme:
- The guidance gives an example of an investor who can claim £37,500 from one scheme and £60,500 from another, giving a total figure of £92,500 instead of the correct figure of £98,000.
- The second error made in the guidance says 25% of a pension pot of £120,000 would allow a pensioner to receive a maximum lump sum of £27,500, instead of the correct figure of £30,000.
- The guidance also suggests that adding together pre- and post-A-Day lump sums of £30,000 and £27,500 would give a saver a total of £60,500, rather than the correct figure of £57,500.
“It’s a bit of a shambles, isn’t it?An HMRC spokesman is quoted by MoneyMarketing:
This is the government department responsible for collecting the nation’s taxes, and it would seem it hasn’t yet got its GCSE in arithmetic.
It does rather dent my confidence in HMRC."
“We are sorry about this, the guidance will be updated as soon as possible.”HMRC would not confirm when the next review is due to take place.
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
What is TAXWISE?
TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.
To find out more, please use this link Taxwise
Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.
Click the link to read about: Tax Investigation for Dummies
HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"