F
or more than a decade my husband and I were clients of a financial advice firm called Addidi Wealth. During this time I was working for the civil service and would exceed my pension allowance (the annual amount that can be saved into a pension while still qualifying for tax relief) every year — leaving me with an income tax bill on the excess.
I used the Scheme Pays system to settle the tax, which meant that money was deducted from my pension and paid to HM Revenue & Customs.
Every year I would send a form to my financial adviser who would then arrange this with my pension company on my behalf. My problem started in 2020 after Addidi Wealth was bought by another financial advice firm called Progeny and our adviser left the business. After 14 months with our new adviser, my husband and I decided to seek advice from another company.
Fast forward to last year when I had a bill from HMRC saying that I owed income tax of more than £19,000 and a late payment penalty of £4,160. HMRC explained that I had exceeded my pension allowance in 2019/20 and had not paid tax on the excess. I was shocked because this meant that Progeny had failed to carry out my Scheme Pays request all those years ago. Even more concerning was that Progeny had carried out two annual reviews since that event which were based on the erroneous assumption that the tax liability had been settled.
