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  • Tax on state pension and work pensions in the first year of retirement

    I have paid way too much tax and am rather confused by hmrc. When you start to collect state pension mid year, hmrc set tax codes to claw back money from your primary work pension. I understand the reason but not why they presumed to take way more tax than needed so that I will have paid 27.5 pence in the pound on my taxable income at the end of the tax year. It seems like they make an assumption you receive an amount of state pension equal to the whole of your annual state pension award in the current tax year even though you are getting paid the state pension for only a proportion of the first tax year in which you receive it. The problem I have is that I am not confident that at the end of the tax year they will have the knowledge of the actual state pension I actually received from the DWP in the first tax year which is less than the award because I only got it for a part of the tax year.