Taxman's maths mistakes: what it means for you
Filed under: Tax
means that advice it gave out relating to pensions may be misleading.
So what were the mistakes, and should you be worried?
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The mistakesThe document in question was a manual offering guidance about pension schemes and tax. The thorny area was the question of how much someone can take in tax free cash when they hold pensions with more than one scheme.
There were a number of illustrations in the document, but when Aries Pensions director Gary Chamberlain checked the maths, he discovered it was riddled with mistakes.
These are not issues of interpretation, but basic maths errors. So, for example, it works out what would happen if you took £37,500 from one scheme and £60,500 from another. However, it calculated the combined total as £92,500 instead of £98,000.
Later it refers to 25% of a pension pot of £120,000 - which it puts at £27,500 rather than £30,000.
And later still it claims that adding together two lump sums - one of £30,000 and one of £27,500 - would create a total of £60,500, instead of £57,500.
An HMRC spokesman told Money Marketing magazine: "We are sorry about this, the guidance will be updated as soon as possible."
The impactThe good news is that these are just theoretical mistakes. The rules in the guidance are correct, and anyone following them carefully - and has the ability to do basic maths - will be fine.
The real worry, however, is that an organisation supposedly stuffed with experts and boffins can't do simple sums.
As Patrick Connolly, an adviser with AWD Chase de Vere says: "The consequences of this particular mistake may be relatively minor. However, clearly it's a concern because HMRC should be the most reliable source of taxation information we have. I would be interested to know how they will ensure this sort of thing cannot happen again, because next time a mistake could have more major consequences."