How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask bigduckontax Your Own Question

bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3605
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

I was awarded A LONG TERM COMPENSATION . By the MOD Accepting

Customer Question

I was awarded A LONG TERM COMPENSATION . By the MOD Accepting responsibility for the death of my husband. In 2013
Since then I have been paying tax on the L T C including some at the higher rate.
There are certainly mixed messages Do I don't I pay Tax.
Do you know the answer please.
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
Please note that Just Answer is not part of HMRC, indeed it has nothing to do with that Department being an independent tax advice site.
Compensation for deaths in such cases would normally be outside the UK taxation envelope, but a MOD pension granted against your husband's service under The Pensions Warrant would be taxable. However, the authority paying such a pension would normally operate PAYE procedures to ensure that you are tax neutral at the end of every tax year. However, if you are in receipt of Bereavement Allowance which runs for a year this is taxable, but paid gross which, unless your tax code has been adjusted accordingly, could throw a spanner in the works. If you are not in receipt of this benefit the form BB1 is used to claim it is available at all Job Centres.
To be in higher rates tax you would have to be earning a taxable income in excess of GBP 31865 per annum after deduction of your personal allowance of 10600. Clearly something is wrong here, but you have done the correct thing writing to the relevant tax office asking for an explanation. It should resolve itself, but please remember that HMRC are very short staffed these days and it will probably take a month for anything to happen.
I do hope that I have helped shed some light on your situation.
Customer: replied 1 year ago.
You have assumed that the payment is a pension At no time has it been described as a pensionF N T
Expert:  bigduckontax replied 1 year ago.
I have not assumed that it was a pension, I merely drew your attention to the fact that if a pension has been awarded under the Pensions Warrant it is subject to income tax as indeed is Bereavement Benefit. It would be normal for a deceased serviceman's widow to receive such a pension irrespective of any other compensation. I am aware of one case where a widow who was herself serving received full army pay plus a half rate widow's pension from the MOD in respect of her husband who died whilst in service plus a widow's pension from the State which current widows no longer receive, the benefit rules having changed.
I reiterate that compensation for death, presumably, in this case, in lieu of damages, is usually outside the taxation envelope. As far as I can see from the tenor of your question you have done the correct thing by raising the matter with your tax office.
Customer: replied 1 year ago.
It is a mind field addad to which ,there are seemingly many departments involved in the various stages of the final decisionThank you for your time F N T
Expert:  bigduckontax replied 1 year ago.
You are quite correct although the MOD are very good in this area. You may find that the War Pensions Agency has become involved; they can be contacted at: Norcross, Blackpool, FY5 3WP, Tel: *********** and they are equally efficient. Then, of course, there is your own tax office.
Please be so kind as to rate me before you leave the Just Answer site.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3605
Experience: FCCA FCMA CGMA ACIS
bigduckontax and 2 other Tax Specialists are ready to help you
Expert:  bigduckontax replied 1 year ago.
Thank you for your support.

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.com/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.com/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    2333
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.com/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.com/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    270
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.com/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions