Standard Life post issue delivers more chaos

I was one of the unlucky ones who received my Standard Life dividend as income having requested it as capital. Now I have genuinely lost my cheque! What are the chances of Standard Life re-issuing my cheque as capital?

They have not been responsive prior to this and I am not hopeful.

Mr KS, email

I can’t answer for their responsiveness to date.

I have had a very mixed bag on that issue with some people very pleased with the attention given to their complaints and more arguing that the company seems to be doing little but protect itself.

That seems a little unfair. I’m sure they would not, in their worst nightmares, have engineered a scenario like that in which their Irish shareholders find themselves. I think they are, like many of those shareholders, a little nonplussed at just how a fairly straightforward mailing process can go so chaotically wrong without anyone being able to determine why – or even in which country?

On the more central point of your letter, there is absolutely no chance of Standard Life, or their registrar Capita, reissuing a cheque as capital when it was originally sent as a special dividend/income.

Getting cheques reissued anyway in these cases can be a process fraught with bureaucracy but to do what you suggest would be to allow all the disappointed Standard Life shareholders effectively re-open the whole return of value process – something the company is adamant it cannot do.

An Post's system not 'all embracing' Thank you for persisting with Standard Life issue. As per my previous letter, I did contact An Post about the freepost issue. The number I used was 7057000 (Headquarters, GPO, O'Connell St, Freepost, Dublin 1). I was told that a "no stamp required" envelope to a UK address without a valid An Post postage stamp would not be despatched and would be diverted to Roscommon.

I queried that with Capita who assured me the envelope was valid and paid for by them.

Back to An Post – I told them the story and, after several attempts, was put through to another department where I spoke to a very helpful woman who said, as you did, that it was not a "tracked" system but that if a letter to Standard Life Shareholder Services (Capita) in Beckenham UK had been refused and diverted to Roscommon it should show up on her system and there wasn't such a letter.

However she did say her system was not "all embracing".

Mr DL, email

The inability of postal systems, between them, to process a long-established international business reply envelope is staggering.

Royal Mail has now got back in touch with Standard Life to say that, yes, the failure of the letters to arrive on time was a postal system malfunction and, no, they have no idea how it happened, or even where, ie, within Royal Mail or at An Post.

The fact that all the letters affected were from Irish shareholders might point to an An Post issue but there is absolutely no evidence that that is the case and, as letters from here tend to be processed through the same Royal Mail sorting office, it could just as easily be a Royal Mail issue.

A spokeswoman for An Post has declared fairly definitively: “There is no operational reason for this service issue. The International Reply Service has been in operation for many years and is commonly used by business.

She added: “An Post staff are fully au fait with it and how it operates. The envelopes are immediately recognisable and processed in accordance with agreed international procedures.”

Most of which might be true, but as the volume of mail successfully reaching me on the issue attests, people were getting very confusing messages from An Post staff on the ground.

Should Standard Life take the blame?

Do you consider that Standard Life should try to facilitate people whose forms arrived late in attempting to have the 10 per cent UK tax refunded to them.

After all, the company supplied the forms and arranged their return (via Capita ) and so must have some responsibility in the fiasco!

Mr CO'R, email

Standard Life has been in touch with the Irish Revenue on several occasions now about the fallout from this issue, though I don’t get the impression that they have got very far.

Clearly having got confirmation from the Royal Mail that the problem was a postal system issue and not a matter of tardy shareholders, it is examining with Revenue how to have the stated intention, communicated in timely fashion to the company’s registrars, honoured.

However, as other readers have pointed out, Revenue does not make tax law, it merely implements it and, in this case, as the money has been paid inadvertently as a special dividend, it is obliged to treat it as income for tax purposes. If our tax authorities started manipulating tax law to suit individual hard cases, I can just imagine the fallout in terms of legal challenges and precedent etc.

While there is provision in the double taxation agreement to treat dividends from British companies paid to Irish tax residents net of the 10 per cent withholding tax, as grossed up, ie, the Irish tax people treat the net dividend you receive as the gross dividend and tax it accordingly. they don’t tax you for the money retained by the UK revenue – there is no provision for ordinary retail shareholders to be able to claw back or otherwise offset that 10 per cent withheld.

Given that Standard Life has been in touch with the Irish Revenue and taking that this 10 per cent withheld by the British tax authorities is another effective loss to people through no fault of their own, I’m sure the company would be open to making representations.

Whether it will prove anymore persuasive with the UK authorities than the Irish, I can’t say.

Unfortunately, it appears the Standard Life shareholders have fallen between two stools, the correctly rigid rules under which the Revenue operates and the tight parameters governing return of value exercises. Send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice.