The question of taxation of pension benefits in some circumstances following re-employment is proving a difficult subject to resolve.
Also, see the Pensions Ombudsman determinations on tax liabilities on re-employment-
Cherry v The Police and Crime Commissioner of South Wales
Pensions Obudsman determination-Firefighters Pension Scheme
NARPO has been working hard to provide answers and an acceptable solution
Whilst we agree that tax is a personal matter we have been the only representative organisation which has endeavoured to provide information and advice on this worrying topic. We will continue to seek a solution and provide that advice.
We also understand that NPCC and the Police Federation, whilst not in a position to provide individual advice, have also made representations along the same lines as NARPO to the Home Office seeking a fair solution to this problem.
One difficulty with this issue and the current position is, as we understand it, that several forces are independently making representations to HMRC to seek a solution. HMRC can from our own experience be cautious in their approach to matters such as this and this can prolong the process of negotiations. NPCC as a body is not involved in those negotiations, which are being conducted on a force by force basis, but, as well as making representations to the Home Office on this matter, NPCC has made similar representations to HMRC. It is our understanding that whatever results from the individual force dealings with HMRC, the Revenue will be seeking a single solution for all forces.
If however you have been told by your force that you have a tax liability, one course of action would be to write to the force, expressing surprise at the position you find yourself in and seeking a written response from the force as to the actual tax payable and the specific reason for that tax demand. Once the force has responded, we still believe it appropriate to make a complaint of maladministration of the pension scheme, initially through the force pension Internal Dispute Resolution Procedure and eventually to the Pension Ombudsman.
This is a very complex area substantially influenced by individual circumstances. NARPO are not tax experts and those affected should actively consider obtaining independent tax advice.
Use the links for further advice:
- Police Pension useful Q & A
- Technical Analysis
- Protected pension age table
- Pensions Tax: COVID-19 related changes to protected pension age
Whilst we are unable to provide any tax advice to individuals, use the link to view the technical pension manual of the HMRC website which contains useful explanations of the current situation: HMRC Pensions Tax Manual
Any members who feel they may be affected by this, should consider taking their own tax advice. One of NARPO’s member service providers is TWD Accountants who specialize in tax matters.