State Pension and how to record on self assessment tax form

Hi,

Yes, you would be taxed based on the entitlement for the year rather than the payments you received in the year. The start date and the weekly rates are provided to HMRC and this is used to estimate the amount.

Thank you.

Hi, I think we are aware that the amount is supposed to be the entitlement during the year but in my example that is clearly not the case. Can you please respond to that example and the questions asked? Thanks.

Hi,

We don't have access to the calculator that the online system uses to estimate the State Pension amount. After the return has been filed they can contact our Self Assessment team and we can review the figure that has been calculated.

Self Assessment: general enquiries

Thank you.

Thank you. I will report back on the outcome of that discussion...

Hi Gary C,

If the pre-populated figure is incorrect this needs to be reported to the Self-Assessment department after the return is filed.
We can not provide any further information over this forum.

Thank you

 

I have a slightly different question, the answer to which is important for planning purposes. This tax year, I shall receive the usual 13 payments of State Pension, the first being on 6 April 23 and the last being on 4 April 24. However I believe my ENTITLEMENT will be to 53 weeks' income, so will my tax liability be based on 53 weeks? And what figure will DWP supply to pre-populate my SA return?

Correction to above post - there will be 14 payments in this tax year!

I turned 66 on 29 Oct 23 I received notification from DWP that I would be paid £743.46 (for 3 Wks & 4 Days) on 22 Nov, and thereafter £843.88 every 4 weeks, which means by the last payment date in the 23/24 tax year ( 13th May) I would have received £4128.98 A couple of days ago I received a coding notice from HMRC which used a State Pension amount of £4641 It would appear that this amount has been calculated by multiplying the number of whole weeks pension that I have received, but this means that I would have earned 4 days pension in the first payment period on which I won't be liable for tax. It also means that I could be liable for this tax year on 3 weeks payments that I will not receive until the next tax year. Can anybody tell me if this figure has to be adjusted in any way when submitting my Self-Assessment Return? The reason for asking and needing to know in advance is so that I only draw down enough from my other pensions to meet my £12570 Personal Allowance

Hi John,

Your state pension is paid four weekly so will be based on the 13 payments due and the department of works and pensions will notfiy HMRC of the amount.

If you want to check the amount you can contact the department of works and pensions on 0800 731 7898, Monday to Friday 8am to 6pm.

Thank you.

I am not sure that will help much. We went down that route and got only the weekly amount clarified and the number of full weeks. When we spoke to them they simply missed the point and talked about how many full 4-weekly payment fell in their payment periods that do not coincide with the tax year and finally tried to say how many of those weeks fall to be taxed in the year, getting that part 100% wrong. When we spoke with the SA team they too could not understand the 1 to 6 days entitlement in the first week and ultimately said that if we wanted to put a higher figure on the tax return then that is fine with them. Clearly, since the new state pension was introduced and the first and last weeks of a person's pension is apportioned to days, the link between DWP and HMRC is not working properly leaving people who want to "do the right thing" in a quandary and ultimately having to put a figure on their return that even HMRC cannot confirm is correct. I think this needs to be escalated to your policy team.

I have been following this thread and have now come to complete my Self Assessment tax return for 2023-24, having started my state pension in that tax year. Yes, there is a pre-popoulated figure for state pension, which only considers whole 4 weekly payments, i.e it does not include the few days paid at the start before the 4 weekly amounts kick in. Nor does it include the days after the last 4 weekly payment in the tax year. The pre-populated figure is therefore clumsy and inaccurate and could be programmed to be very precise if HMRC wanted to. You can amend the pre-populated figure and then you are prompted to explain why you have done so in the white box that follows. This white box ends up on your tax return as Box 19 "Any other information" on SA100, so you have evidence of what you have said. EIM75700 - The taxation of pension income: social security pensions says: "the taxable amount is the amount of pension accruing in the tax year. This may be different from the amount actually paid in a tax year" Yes, I agree. So my question to HMRC is surely the "pension accruing" should be calculated on a daily basis, from your 66th birthday date, or 6 April, to 5 April. It is easy to work out your daily rate and multiply this by the number of days. HMRC needs to confirm "pension accruing" is on a daily basis as there can be no other definition.

nealry66, My understanding is that the state pension is a weekly benefit paid in arrears, which accrues when each weekly payment falls due, so the accruals basis would be weeks, not days. The law also provides that at commencement and "the other end" the weekly benefit is apportioned to days - this is the only time that provision is made to pay part weeks, which supports my understanding that it is a benefit that accrues on a weekly, not daily basis. So, I would consider the amount to enter on the return, is the first payment received (that part-week plus a number of other weeks), plus all 4-weekly payments received in the tax year, plus the number of full weeks accrued between the final 4-weekly payment and 5 April.

Gary C, Thank you for the reply and the well written explanation. That is how I have calculated mine, but I had not submitted my return yet, but will now do so. You have obviously done a lot of research. It is a shame HMRC can't give such a clear explanation or agree to your above paragraph, but maybe they can now do so on here. Thanks again.

Not HMRC...tax acct. The standard practice is 52 weeks at the weekly rate after the increase each April or 13 x the four weekly rate recived each year, taken from any payment received that doesnt cross the tax year ends. This is the method used by DSS/HMRC and the accountancy industry ad infinitum, there is no need to get in to "accrued periods" etc, as it is payable in arrears and everyone's payment dates are different (day of the week paid dependant on last letter of NI number) this is the accepted way it is assessed, it is the way it is calculated for tax codings (plus or minus £5 for rounding through PAYE) and is the figure HMRC would expect.

Hello Clive Smaldon, HMRC's SA form SA150 notes pg 6 box 8 describes how to calculate the pension as usually one week at old rate and 51 at new rate and it is only for certain pre 2010 pensioners that it is 52 times new rate. For part years it does not say what to do with the few extra days received at commencement. I find tax codings tie up perfectly using these formulas for whole years. I would always advise including the few extra days at the commencement of pension and find Gary C's paragraph above the best summary.

Hi nearly66,

HMRC receives your State Pension figure from the Department for Work and Pensions. If the figure you actually receive differs from this, you can amend your return to reflect your own figure.

Thank you.