I paid HMRC underpaid tax but it took the amount out of my pension again

At the end of the last tax year I received a statement from HMRC saying I owed them £422.60 in underpaid tax.

As I was retiring in April, I wanted to be up to date so I would receive my correct pension amounts with the correct coding so I paid the amount by bank transfer.

This is where the trail goes cold. Although I am told HMRC can see the amount, it will not credit my PAYE tax account with this figure.

I have also had nearly the same amount of £422.60 taken out of my private pension now meaning I have paid the amount twice. How can I get it back? I.B., via email

One man was frustrated after the HMRC continued to wrongly take money from his pension

Grace Gausden, consumer expert at This is Money, replies: This has been a taxing situation for you – and the issue has not been resolved nearly a year later.

After being informed by the HMRC that you had underpaid your tax by £422.60, you were happy to pay the amount.

You were keen to get it sorted by April of last year, after being informed in March, as you had reached retirement age and you wanted your finances in order so you could you draw your private pension.

After sending over the payment, using your unique tax reference (UTR), you presumed this would be credited to your tax account.

However, after hearing nothing by May, you contacted HMRC which said although it had received the funds, nothing further could be done to process it until it received your P11D form – one that your employer issues regarding your ‘benefits in kind’ such as company cars.

After receiving your copy of the form, you rang HMRC which confirmed it had also received it but the money was still sat there and hadn’t been processed.

During this time, you noticed that the HMRC reclaimed the underpayment via an altered tax code from your private pension, meaning you were now overpaying.

Understandably, being charged for the same underpaid tax twice was frustrating, especially as you had since retired and needed the funds.  

You chased the HMRC again in October and were told that as you had paid the amount using your UTR reference, and not your National Insurance number, the payment was with the self-assessment team.

The HMRC assistant arranged a transfer to take place but this never happened.

In the meantime, it continued to reclaim the underpayment from your private pension which meant by November, it had taken the payment nearly twice over.

In mid-December, after phoning HMRC yet again, and finding the money was still sat there, you asked to be put through to a manager.

HMRC eventually returned the money after insisting the letter only gave an estimated figure

However, you were told this was not possible. When you asked, instead, to be put through to the self-assessment team, you were advised this, too, was not possible as the team had no phones.

By this point, you were getting incredibly frustrated as you had paid out nearly another £422.60, despite paying the underpaid tax in good time.

Therefore, I contacted HMRC to find out why it was taking so long for the payment to processed and why it decided to take a further £422.60 in the meantime.

An HMRC spokesperson said: ‘We are sorry for the inconvenience caused to Mr B. We have now traced his payment and updated his records accordingly. 

‘We will contact Mr B to explain his case and assure him that he will not pay more tax than is due.’

It added that due to a change in your circumstances, it wrote to advise there would be an underpayment of tax on your account and provided an estimation of what that might be, although this was not a payment request as the actual figure was yet to be finalised.

HMRC said you decided to pay the estimated figure, but issues with the way this payment was made meant this did not update his records correctly.

It has fortunately now traced and reallocated this payment and updated his records accordingly. You have now received a refund of the extra payments made during the current tax year.

Hopefully now this is all sorted, you can fully enjoy your retirement.  

A family was due to fly to Florida but are still waiting for a refund after they cancelled it 

Hit and miss: This week’s naughty and nice list

Each week, I look at some of the companies that have fallen short of expected standards as well as those that have gone that extra mile for customers.

Miss: This week, reader Sarah, said she had been struggling to get a refund from Travelplanners.

She said: ‘Back in 2018 we decided to book a holiday of a lifetime to celebrate my father’s 80th birthday to Florida. We planned to go in March 2020.

‘We booked everything with Travelplanners with the whole package costing for £9,148. However, due to the pandemic, our holiday was cancelled. Travelplanners said we could either have a full refund or move the whole package.

‘We moved the whole holiday to September 2020 at a further cost to ourselves but then had to move it again to September 2021 at an even higher cost, bringing the total to £11,783.

‘Sadly, my father suffered poor health and come August 2021 we decided he would not be fit enough to endure this trip of a lifetime so we asked for a full refund of £11,783 which the company agreed.

‘We heard nothing for some time then finally received a letter with a breakdown of all our payments and asking us to prove every single with original statements before they are prepared to make any refund.

‘We are a family of four and were going with my parents on this holiday therefore the many payments were made on many different credit cards. The ones we used we no longer have as we regularly change credit card companies to continue to get a good rate.

‘I have explained to Travelplanners on several occasions that trying to find statements from nearly three years ago from my parents and ourselves is proving difficult but they are insisting the refunds are made to the original cards.

‘The company also keep sending me daily a Refund Declaration letter which I have not signed.’

I contacted Travelplanners as it was a large amount of money to be missing during the festive period, especially after it had promised a quick refund. 

A representative said she has looked into this and said it could see the firm was trying to process the refund but it couldn’t do so without you signing the declaration letter – which means agree you will not be making a chargeback or Section 75 claim.

With regards to your cards, it said it can refund to your new, chosen card, despite previously being advised otherwise. 

After I relayed this information, you signed the form and have, fortunately, now received a full refund.

Whilst your travel plans did not take off, I hope you and your family can celebrate your father’s birthday another way.  

A Waitrose customer that was kept waiting was impressed when the team offered him flowers

Hit: In happier news, reader John, praised Waitrose‘s service during the festive period.

He said: ‘On Friday, I arrived at Waitrose for my click and collect order.

‘I phoned through to let them know I had arrived and were told it would be five minutes. I could see they were very busy but after half an hour I phoned again to say that nothing had arrived.

‘The staff were most apologetic, saying the message hadn’t been sent to the delivery staff who thought I hadn’t arrived.

‘The food arrived within the next five minutes and shortly afterwards a lady arrived with a bunch of flowers. That was a lovely gesture and much appreciated.’ 

Although you were forced to wait for your Waitrose, the customer service made the delay worth it.

This post first appeared on Dailymail.co.uk