Latest news with #refund
Yahoo
2 hours ago
- Business
- Yahoo
BT refunds £18m to customers over contract failures
BT has refunded £18 million to customers after Ofcom ruled it did not give them enough information about their contracts. The regulator fined BT £2.8 million last year after it failed to provide some EE and Plusnet customers with 'clear and simple' contract information before signing up to a new deal. Since June 2022, phone and broadband companies have been required to give consumers and small businesses the details of a contract, as well as a short summary of the key terms, before signing up. This includes the price and length of the contract, the speed of the service and any early exit fees. Ofcom opened an investigation into BT, which owns EE and Plusnet, having received information it may have failed to provide the documents. It found more than 1.3 million sales were made without providing customers with the adequate information. At least 1.1 million customers were affected. Ofcom found the telecoms giant broke consumer protection rules, requiring BT to contact affected customers, explaining it had not provided them with the necessary information. However, some affected customers left BT before the end of their contract and may have been charged an early exit fee, according to Ofcom. In a statement, Ofcom said: 'As well as fining BT, we also required it to amend its sales process and refund any affected customers who may have been charged for leaving before the end of their contract period. We told the company that if it was unable to refund any money, it must donate it to charity. 'As a result of this enforcement action, BT has now refunded or credited £18 million back to customers and donated £440,000 across 17 charities where refunds or credits were not possible.' A BT spokesman said: 'We're sorry that pre-contract information and contract summary documents were not available to some of our customers in a timely manner. 'We have taken steps to proactively contact affected customers and refund them if they had subsequently paid any early termination charges. We take compliance seriously at BT and have worked closely with Ofcom to implement all remedial actions.'
Daily Mail
3 hours ago
- Business
- Daily Mail
HMRC hands back £48.7m in overpaid pension tax in just three months
HM Revenue & Customs is still refunding millions of pounds back to Britons in overpaid pension tax. It repaid £48.7million in overpaid pension tax between 1 April to 30 June, new data from HMRC shows. There were 13,000 refund forms processed by HMRC in the period and the average refund came in at around £3,800. Between January and March, HMRC refunded £44million in overpaid tax back to pension savers. The total number of claims for overpaid tax on pension withdrawals has now gone over half a million since the introduction of Pension Freedoms in 2015. People taking out a lump sum from their pension for the first time are at particular risk of overpaying too much tax as they can be taxed with an emergency tax code. Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: 'The overpaid pension tax saga continues to drag on.' She said 'these refunds amount to a significant chunk of change.' What causes the problem? People can access money from their pensions in two ways. First, you can take a 25 per cent lump sum of your pension tax-free. The rest is charged at your normal income tax rate. The second option is to take a lump sum from a pension drawdown plan. If you do this, 25 per cent of your total pension savings is tax-free and any subsequent withdrawals are subject to income tax. The issue of overpaying tax on pension withdrawals often hits people who are taking a lump sum out of their pension for the first time. Morrissey said: 'They get taxed on what is known as a 'month one' basis, which means it's treated as though the same amount will come out every month. 'This results in a far bigger tax bill, which can come as an unpleasant surprise or even de-rail people's retirement plans.' Since pension freedom reforms were introduced in 2015, HMRC docks extra tax off any initial sum taken from a fund on the assumption it could be 'month one' of a series over the rest of a tax year. In essence, HMRC assumes the pension lump sum you are withdrawing will be repeated every month. Pension providers typically collect the tax on your behalf, meaning the lump sum you get is paid net of tax. The pension provider may not know what an individual's tax code is or have any details on their other sources of income. As a result, an emergency tax code is used on the withdrawal. How can taxpayers get a refund? Affected pension savers currently have to claim back their cash from HMRC themselves or wait until it is done after the end of the current tax year. Morrissey said that while the overpaid tax can be reclaimed, 'it's an admin headache that people can well do without.' She added: 'Ten years on from the advent of freedom and choice it's a process that should have been consigned to history.' If you make a single lump sum pension withdrawal, check you have not paid more tax than you should. You can apply for a tax refund online on HMRC's website. Morrissey said: 'If you do get clobbered with a big tax bill, then you will need to fill out one of three forms so that HMRC can process the refund. Otherwise, you can wait until the end of the tax year.' How can pension savers help themselves? The pension saver tax saga is ongoing and should have been nipped in the bud years ago. However, there are steps pension savers can take to mitigate the risk of overpaying tax. Morrissey said: 'You could make your first pension withdrawal a relatively small one. 'However, if you were looking to take a lump sum to fund travel or home renovations, for instance, you would need to plan ahead to make sure the money you take isn't whittled away by tax which could delay your plans. Is HMRC doing anything about this? After previously defending the system and insisting 'nobody overpays as a result', HMRC has vowed to put a stop to the practice of forcing pension savers to apply for tax refunds. In a newsletter in January, HMRC said that from April it would move much more quickly to replace 'emergency' tax codes with regular tax codes, ensuring the correct amount of tax is deducted in real time An HMRC spokesman told This is Money in January: 'Those who, for the first time, start to receive ongoing pension payments will benefit from this change. 'We're considering options for people taking ad-hoc lump sums and will consult with the industry before taking our next steps.' Webb said: 'How longer will all of this go on? Ten years on from the introduction of Pension Freedoms, tens of thousands of people each year are still having to fill in forms to claim back overpaid tax on their pensions from HMRC. 'This is a system designed for the convenience of the tax office, not the taxpayer. 'Given that most people in retirement pay tax at the basic rate, it would not be difficult to have a system which got things right for most people most of the time, rather than making over-taxing people part of 'business as usual'. 'It is time to that the whole system was simplified and made more predictable for pension savers looking to draw on their pensions.'
The Independent
a day ago
- Business
- The Independent
BT refunds £18m to customers over contract failures
BT has refunded £18 million to customers after Ofcom ruled it did not give them enough information about their contracts. The regulator fined BT £2.8 million last year after it failed to provide some EE and Plusnet customers with 'clear and simple' contract information before signing up to a new deal. Since June 2022, phone and broadband companies have been required to give consumers and small businesses the details of a contract, as well as a short summary of the key terms, before signing up. This includes the price and length of the contract, the speed of the service and any early exit fees. Ofcom opened an investigation into BT, which owns EE and Plusnet, having received information it may have failed to provide the documents. It found more than 1.3 million sales were made without providing customers with the adequate information. At least 1.1 million customers were affected. Ofcom found the telecoms giant broke consumer protection rules, requiring BT to contact affected customers, explaining it had not provided them with the necessary information. However, some affected customers left BT before the end of their contract and may have been charged an early exit fee, according to Ofcom. In a statement, Ofcom said: 'As well as fining BT, we also required it to amend its sales process and refund any affected customers who may have been charged for leaving before the end of their contract period. We told the company that if it was unable to refund any money, it must donate it to charity. 'As a result of this enforcement action, BT has now refunded or credited £18 million back to customers and donated £440,000 across 17 charities where refunds or credits were not possible.' A BT spokesman said: 'We're sorry that pre-contract information and contract summary documents were not available to some of our customers in a timely manner. 'We have taken steps to proactively contact affected customers and refund them if they had subsequently paid any early termination charges. We take compliance seriously at BT and have worked closely with Ofcom to implement all remedial actions.'
Daily Mail
a day ago
- Business
- Daily Mail
BT pays customers £18m after Ofcom investigation
BT has refunded millions of pounds to customers after Ofcom ruled that it didn't give them enough information about their contracts. Last year, the regulator fined BT £2.8million after it failed to provide some EE and Plusnet customers with 'clear and simple contract information' before signing up to a new deal. Since June 2022, phone and broadband companies have been required to give consumers and small businesses the details of a contract, as well as a short summary of the key terms, before signing up. This includes the price and length of the contract, the speed of the service and any early exit fees. Ofcom opened an investigation into BT, which owns EE and Plusnet, having received information it may have failed to provide the documents. It found that more than 1.3million sales were made without providing customers with the adequate information. At least 1.1million customers were affected. It said that the telecoms giant broke consumer protection rules. It was subsequently required to contact affected customers, explaining it had not provided them with the necessary information. BT also gave customers the opportunity to request the information, and cancel their contract without charge. However, some affected customers left BT before the end of their contract and may have been charged an early exit fee, according to Ofcom. It said: 'Our rules are clear that if the required contract summary and contract information is not given, the contract is not binding on customers. 'As a result an early exit fee, should not have been payable by these customers. 'As well as fining BT, we also required it to amend its sales process and refund any affected customers who have may have been charged for leaving before the end of their contract period. 'We told the company that if it was unable to refund any money, it must donate it to charity.' As a result of the enforcement, BT has now refunded or credited £18million back to customers and donated £440,000 across 17 charities. A BT spokesperson said: 'We're sorry that pre-contract information and contract summary documents were not available to some of our customers in a timely manner. 'We have taken steps to proactively contact affected customers and refund them if they had subsequently paid any early termination charges. We take compliance seriously at BT and have worked closely with Ofcom to implement all remedial actions.' In addition to the £2.8million fine, BT was last year handed a £17.5million penalty by the regulator after 'catastrophic' emergency call failures. The telecoms giant, which manages the 999 system, sustained a network fault in June 2023, which lasted more than 10 hours and led to almost 14,000 unsuccessful call attempts from 12,392 callers.
The Sun
a day ago
- Business
- The Sun
Over one million BT customers handed £1,000s in compensation after contract failures – are you affected?
BT has been forced to pay out millions to customers after it was found to have failed them over contracts. Watchdog Ofcom has said today the telecoms company has refunded or credited a huge £18million in total to customers. The issue had affected customers of BT subsidiaries EE and Plusnet. The watchdog previously found they had made sales to more than a million customers without providing them with contract summary and information documents.
