1. If you think your tax code is incorrect you should contact HMRC as soon as possible to get it changed. If, on reviewing the information it holds for you, HMRC agrees that the tax code applied to your BAE Systems pension is incorrect, it will then be able to issue a revised tax code to Mercer. If HMRC changes your tax code in the current tax year and the new tax code is on a Cumulative basis, on your next payment your tax will be calculated based on the total amount of pension you have received and tax you have paid since the start of the current tax year (so from 6 April). If this calculation shows that HMRC expect you to pay too much tax in the current tax year, then you will receive a refund of your overpaid tax through the next available pension payment paid by Mercer.
If you do not take action to contact HMRC to resolve a query now and an incorrect tax code has been applied, HMRC should automatically correct it, but not until after the end of this tax year (5 April 2024) when HMRC reconciles your total income and tax position for the whole tax year.
Details as to how to contact HMRC online, by phone or in writing can be found in the guide below. Please note that we are aware that the call waiting times to the HMRC Income Tax Helpline can be substantial (please refer to Q9 in the guide below) and you may wish to consider the other methods of contact.
2. It is important to understand that whilst Mercer is very happy to answer questions about pensions, it has no discretion in relation to tax codes and must apply any tax code received from HMRC. This is because tax is a personal matter and Mercer has no way of knowing what your individual circumstances are when it comes to your personal sources of income. If when you call HMRC, you are advised to speak to Mercer about your query you should follow the guidance referenced within Q8 below, when engaging with the call handler.
3. The Trustees appreciate that tax is a complicated subject. The guide below has been prepared to explain the UK tax codes that can be applied to pensions to help you understand what yours means and importantly what action to take if your net pension has changed because you believe your pension tax code is incorrect. This guide is set out in a Question and Answer format and will hopefully address the majority of questions that you may have. It provides hints and tips about the information you will need prior to contacting HMRC and the specific questions you should ask. Please do take the opportunity to read this guide before contacting HMRC either online, by phone or in writing (contact details can be found in the guide).
Please note that many pensioners will not have a change to their pension, or tax code. For those that do there may be good reason for this change, which HMRC will be able to explain. We understand that HMRC is working through queries raised by our members as best its team can and where HMRC call handlers are unable to resolve a query on first contact, a dedicated resource will investigate.
With HMRC having switched off the automatic connection since mid-August, Mercer has received a high volume of tax code changes from HMRC since the connection was switched on again. We know that some of our pensioners contacted HMRC to discuss the tax codes they received since August. Mercer should now have received the new tax codes for any pensioner who has made direct contact with HMRC to make a change to their tax code and with whom HMRC has verified this change directly. This should now be reflected in the payment made at the end of November or early December (it may be the next month if verification was received during November). The tax code in use appears on a pensioners’ monthly pension payslip, which can be accessed via the Mercer member portal, OneView
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