HMRC beats fixed protection processing problems

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HM Revenue and Customs finished processing applications for fixed protection 2014 on 10 June and individuals who applied for the cover should have received their certificate.

If the fixed protection 2014 application was sent to HMRC before 5 April 2014, but the certificate has not been received by 30 June 2014, the tax office is urging applicants to call 0300 1231079.

Applicants will need to know when the application was sent and their national insurance number.

Advisers acting on behalf of a client were told in the latest HMRC newsletter to confirm whether their client has received the certificate before contacting the tax office as certificates are sent directly to the person to whom the cover relates.

Advisers have only been able to apply for fixed protection 2014 for their clients since last August.

Last November HMRC had to admit there were problems with fixed protection 2014 application form APSS228.

With the reduction in the standard lifetime allowance on 6 April 2014, HMRC introduced two forms of protection.

Fixed protection 2014 will work in the same way as fixed protection 2012 except that the individual’s lifetime allowance will be fixed at £1.5m.

No benefit accrual is permitted after 5 April 2014 and applications must be with HMRC by that date.

Individual protection will allow contributions to be made after 5 April 2014 without the loss of protection.

It will be available where pension benefits are valued at £1.25m or more on 5 April 2014 and provides an individual lifetime allowance of the value at that date capped at £1.5m.

Individual protection will shelter the fund value as at 5 April 2014 but the final rules for how this type of protection will work have yet to be published.