Grieving families are being sent demands from HM Revenue & Customs (HMRC) claiming that tax is due on lump-sum death benefits when it is not.
Due to a computer blunder, relating to the P6 coding notice, relatives are being told that they owe tens of thousands of pounds in income tax on the cash. Whilst this issue was reported to HMRC as far back as 2016, it has still not been resolved.
It is also not clear as to how many people have been affected and how much money the Revenue has gained from the fault in the system.
Sir Steve Webb, Director of Policy at Royal London and a former Pensions Minister, says: “It is distressing enough to deal with bereavement without having the tax office take a chunk of your bereavement lump sum when it should have been tax free.”
If you have received one of these demands, or you have any concerns regarding your tax return or other related matters, our experts at Beavis Morgan are available to assist. We take the hassle of dealing with HMRC away from you, so you don’t need to deal directly with them. We are also able to advise on all aspects of tax whether compliance or planning.
Contact your usual Beavis Morgan Partner for further information and assistance.