Questions Of Cash: Early payment meant extra tax on annuity – and I'm out of pocket

Q. I receive a small monthly annuity from Clerical Medical, paying £423.02 gross, £406.02 net. I received two payments in March, because my April payment date was a bank holiday.

This meant my "April" payment had £84.60 deducted in tax, leaving me just £338.42. Clerical Medical said it was unable to refund me and that I must contact the tax office. But HMRC said it could do nothing. I am out of pocked by £67.60. I am 74 and worked for almost 50 years. EH, Lisburn.

A. Clerical Medical says that as its payment system is automated, it has to choose whether to automatically make payments early or late in these circumstances. A spokesman explains: "We take the view that early payment is less disruptive to our customer base as a whole, so our underlying system is set-up to ensure payments are made early when necessary." It suggests you re-contact HMRC in late May, by when it will have received the tax data for last year and can refund the deductions. If HMRC then declines to make the refund, Clerical Medical will review its position.

But Clerical Medical does admit it was "responsible for poor service". Its call centre staff were wrong to say that HMRC required it to make the payments early; to refer to "double taxation", an incorrect description of the situation; and by failing to offer to instigate the complaints procedure. Clerical Medical has sent you £75 as a goodwill payment in recognition of these errors. If you provide written authority, it will automatically make your payments late in future when your payment date falls on a bank holiday.

Q. I bought an iPhone 4 on an 18-month O2 contract from Carphone Warehouse in August 2010. In November 2011 the phone developed an intermittent fault, through which people I was speaking to could not hear me. This fault is now permanent. I reported it to Carphone Warehouse in March, saying the phone had not met the durability test under the Sale of Goods Act. I was told that as the phone was out of warranty, I would have to pay for repair.

I complained repeatedly to Carphone Warehouse, which insists that I am responsible for the repair. My understanding of the Act is that the seller is responsible for a repair if the item is not durable. I think an iPhone should last longer than 19 months. Carphone Warehouse ignores this point. I feel it is ignoring my claim in the hope I will give up. NS, Edinburgh.

A. Your iPhone failed after the warranty period and after your contract was completed. Even if the iPhone was still in contract, it is very unlikely that Carphone Warehouse would have agreed to have it repaired free of charge. As Questions of Cash has previously explained, suppliers do not normally accept an obligation for the repair of an item out of warranty, even if the service contract is for a longer period.

It is not clear how long an expensive consumer product like an iPhone might reasonably be expected to last – this will be affected by the level of use and how carefully it is treated. Online discussions suggest that iPhones normally last at least 18 months to two years. But there does not seem to be a strong legal case for recompense if the phone stops working properly before then but after the warranty has expired.

USwitch.com – which monitors the phone industry for consumers – suggests that it is sensible to buy insurance to protect against handset failure after the warranty period is over. Its technology specialist Ernest Doku says: "There are both network-led and third-party insurance plans that consumers can take out. Both offer the option of replacement devices, and in cases of more expensive schemes, protection from fraudulent calls and the like."

The good news is that Carphone Warehouse has offered to contribute towards an upgrade for you. A spokeswoman says: "Under the Sale of Goods Act, if a customer has owned a handset for more than six months, then the onus is on them to prove that the phone was faulty at the point of sale. We respectfully submit that this is not the case and that we have fully complied with the Sale of Good Act as the handset was more than 19 months old before a fault was reported. The handset has therefore outlasted its 12-month manufacturer's warranty and the 18 month contract. However, we very much appreciate [the reader's] custom and would therefore like to offer her £50 towards an upgrade of her choice."

Q. My wife and I have banked with NatWest for several years. We asked for a £15,000 loan to consolidate debts, but were refused. I was told to reduce the unused parts of our credit card limits and upgrade to a fee-paying Gold account, to help us obtain a better credit rating. A few months later I was offered a £20,000 loan, at a much higher interest rate, but again refused a smaller loan. I complained and had the Gold account fees refunded, with compensation of £150 – but the bank denies knowledge of the £20,000 loan offer. Should I refer this to the Financial Ombudsman? DK, Dorset.

A. We can often resolve readers' problems, but where the matter is being considered by the Ombudsman it will be regarded as if sub judice – preventing us from being involved. Once a complaint has been decided by the Ombudsman, we will not normally be able to obtain an improved resolution for the reader. If, though, you take a complaint through ourselves in the first instance, you may still complain subsequently to the Ombudsman if we cannot obtain satisfaction. We gave you that advice and you asked us to proceed on this basis, sending us the background papers. However, NatWest tells us that you had in fact already complained to the Financial Ombudsman, so it is unable to discuss your complaint with us.

Questions of Cash cannot give individual advice. But if you have a financial dilemma, we'll do our best to help. Please email us at: questionsofcash@independent.co.uk