My £4,000 pension battle with HMRC You were receiving a pension and were also in employment and paying 20pc tax. Added together, though, this income edged you into the higher 40pc tax bracket. You wrote to me after you received a letter from HMRC threatening you with a debt collection agency. Your mother, aged 88, lives with you and you naturally have no wish to expose her to any unpleasantness. Not least because she has recently suffered a heart attack. You rang HMRC and paid £1,000. You decided to pay the rest over the next few months to calm things down. However, you still wanted to know how the figure had been arrived at. Further to my involvement, HMRC explained at last what was happening. It collects additional tax due by reducing the tax-free amount from your main job or pension by an amount, and this has the effect of collecting the additional tax owed. Although HMRC picked up on the need for this reduction during the 2010/11 tax year and said it sent the coding information to the pension fund provider, the latter is adamant it did not receive it. HMRC had written to you recently, saying it would not be asking your pension provider to pay the money. In certain, limited, circumstances HMRC will give up tax under the provisions of "extra-statutory concession A19" where it has failed to act on information it has received and, because of this, an underpayment of tax has arisen, as happened here. HMRC acknowledges that it held information on its records about your pension and your employment starting in 2007 but failed to make proper use of it. The notes on your record also show that you have called and written to HMRC about the tax codes allocated against your income sources. Now HMRC said that it is satisfied you meet the provisions of this concession. It has agreed to give up tax of £3,915 for the years 2008/09 to 2010/11. HMRC said it is sorry it did not come to this decision sooner and for the conflicting advice you received from it. £275 tax unpaid for 2011/12 was still on the tab because it corrected the position during that year. There may be some interest due on this and HMRC will collect the amount from the payments you have already made. It seems you underpaid tax by £97 for the 2012/13 tax year. It has sent you a calculation about this. HMRC will refund the remainder of the payments you have made once it has done the calculation. You say you are "over the moon" about this result. HMRC said it has let you down and "this is not the level of service we aim to provide." It apologises for the stress caused, and has also sent £50 for goodwill. This you have given to charity.