Change of tax code now on state pension

Why has my tax code gone down now I receive a state pension and also work

Hi,

Your state pension is taxable income and as tax cannot be deducted directly from it, it is put in your code against your employment income in order to collect the extra tax due.

Thank you.

I have been working (part time) AND claiming my 🇬🇧 State Pension since December 2023 BUT have been told via HMRC helpline that they could NOT deduct tax from my 🇬🇧 State Pension AND my 🇬🇧 PAYE earnings by simply applying a revised Tax Code to my PAYE payslip? Instead, I simply received a “Simple Tax Calculation” last September advvisiting me there is £472 odd of underpaid tax for 2023/24 which must be paid in full by latest 31/01/25. Please could you clarify the position as I would far prefer paying tax in stages through my PAYE earnings payslip than to await an surprise tax bill every September...Thanks

Hi,
Unfortunately, it is not possible to deduct tax from the State Pension at source even though it is taxable, as it is paid direct by the DWP to yourself gross. If any tax is due on it, we would adjust your PAYE tax code against any other taxable source of income to collect it at source. Unfortunatley, in some circumstances the PAYE income is not enough to collect what is due, and a simple assessment is created.
It maybe worth contacting our Income Tax team to discuss what tax code is in operation and what tax is being collected.
Income Tax: general enquiries
Thank you.