Thousands of Norfolk pensioners receive tax bill after HMRC blunder
PUBLISHED: 15:48 29 April 2019 | UPDATED: 12:05 30 April 2019
Tens of thousands of pensioners have been the victim of a HMRC mix-up which left many believing they owed money in unpaid tax.
Up to 22,000 former Aviva employees – many of which will have worked for the firm in Norwich and Norfolk – have received the letter stating they had been paying the wrong tax on their pensions.
The insurance giant was created after the merger of Norwich Union and CGU in 2000 and began trading as Aviva two years later. The firm still has a significant base in Norwich.
The letter – dated April 25 – apologises for any “distress” caused and confirms an investigation is ongoing by HMRC.
It appears the confusion has arisen after HMRC systems incorrectly believed each pensioner had two savings accounts.
The letter states: “As many of you are aware, there is an issue with the tax codes calculated and notified to you and to XPS, the scheme administrator, for 2019/20 and, in addition, many of you are receiving notices from HMRC about tax in 2018/19 being underpaid.
“Both the trustee and XPS understand that those of you who have been affected might be distressed by the error and we apologise for this.
“The cause of the error, which resulted in their records showing two Aviva pensions, is currently under investigation by HMRC which has confirmed that the information received from XPS was correct and did not cause the issue.”
Government staff are now painstakingly going over their records to correct the blunder but HMRC has not ruled out some people still overpaying in the short term.
The letter continues: “To correct its records, HMRC will review each Aviva pensioner's record (approx 22,000), correct these if required and issue a new tax code for XPS to use going forward.
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“Until then XPS has been told not to use the new 2019/20 tax codes and instead use the final tax code applied in 2018/19.
“Where possible, XPS will apply the relevant statutory uplift to bring the March tax codes up to the 2019/20 tax year level and this should mean the majority of you will pay the correct amount of tax, with any differences being adjusted once HMRC issue correct tax codes.”
Aviva and HMRC were contacted for comment.