"Alan Frame" wrote
> > Ho hum.
> >
> > Child born just before start of tax year - mother on maternity leave
> > (Normal & additional - i.e. last six months unpaid) for all of 05-06. > >
> > Decides to buy back teachers pension rights for that time, send
> > off cheque to TPS, told as it's a "Method B" lump sum, it's paid
> > gross and tax relief should be claimed from HMRC (I know
> > it's strange, but that's what they say - even for basic-rate tax) > >
> > HMRC reply that no tax-relief available as earnings were
> > not high enough (no surprise as only earnings were 26-weeks
> > SMP) to have paid sufficent income tax in the first place.
>
> Hmmmm. Pre-A-Day, the total of normal pension
> contributions, plus "Method B" lump sums, plus any
> "Method A" regular contributions, plus any FSAVC
> premiums, had to be within the "15% of earnings" limit.
With you there - one would hope that TPS can calculate the correct figure - we asked 'em "How much to make up for reduction in pension caused by maternity leave?" and paid what they asked...
If earnings were too low to have paid the
> relevant amount of income tax, then is the
> "Method B" lump sum under 9% of earnings?
> [Assuming normal 6% member
> contributions already paid to TPS.]
... during AML, the 6% isn't paid, AFAIK - in fact the amount was in the order of (15% salary minus fractional contribution/deduction on SMP)
Maybe you've found the problem -
IMO, Yes, if "earnings" are "normal contractual salary", but No if "earnings" are "actual amount recieves during tax year:period of Standard/Additional Maternity Leave", 'cos that was notmuch/zero.
Do TPS use the former meaning, but HMRC the latter?
No FSAVCs or Method A additional contributions, BTW.
I can't believe that buy-back for maternity leave is an uncommmon situation.
Thanks, 'shoulda Stake'd/SIPP'd it' Alan