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  • FIRST POST
    • deepdaleducky
    • By deepdaleducky 6th Jul 17, 11:32 PM
    • 22Posts
    • 45Thanks
    deepdaleducky
    First pension payment which tax year?
    • #1
    • 6th Jul 17, 11:32 PM
    First pension payment which tax year? 6th Jul 17 at 11:32 PM
    If a first pension payment is received on 6th April ( first day of the new tax yr) and the pension is paid one month in arrears which tax year does the payment belong to ?
Page 1
    • dori2o
    • By dori2o 7th Jul 17, 12:22 AM
    • 7,302 Posts
    • 12,195 Thanks
    dori2o
    • #2
    • 7th Jul 17, 12:22 AM
    • #2
    • 7th Jul 17, 12:22 AM
    If a first pension payment is received on 6th April ( first day of the new tax yr) and the pension is paid one month in arrears which tax year does the payment belong to ?
    Originally posted by deepdaleducky
    If its state pension then the tax is applied to the income in respect of when it's applicable. Not when its paid, so some, if not all will apply to the previous tax year.

    If it's a private pension it applies to the tax year in which it's paid, even if it is paid in arrears.
    To equate judgement and wisdom with occupation is at best . . . insulting.
    • deepdaleducky
    • By deepdaleducky 7th Jul 17, 8:16 AM
    • 22 Posts
    • 45 Thanks
    deepdaleducky
    • #3
    • 7th Jul 17, 8:16 AM
    • #3
    • 7th Jul 17, 8:16 AM
    Thank you for explaining thats exactly what I needed to know .
    • uknick
    • By uknick 7th Jul 17, 9:57 AM
    • 678 Posts
    • 303 Thanks
    uknick
    • #4
    • 7th Jul 17, 9:57 AM
    • #4
    • 7th Jul 17, 9:57 AM
    If its state pension then the tax is applied to the income in respect of when it's applicable. Not when its paid, so some, if not all will apply to the previous tax year.

    If it's a private pension it applies to the tax year in which it's paid, even if it is paid in arrears.
    Originally posted by dori2o
    It's interesting there's a difference.

    When you say state pension are you referring to the state "old age" pension and associated pensions, e.g. SERPS, 2SP and others of that ilk or, all state paid pensions such as the civil service pension?


    EDIT: Just checked my civil pension from last year, and it is accounted for in the tax year it's received, not when it's due. Therefore, treated as a private pension.
    Last edited by uknick; 07-07-2017 at 10:31 AM.
    • polymaff
    • By polymaff 7th Jul 17, 6:38 PM
    • 1,683 Posts
    • 717 Thanks
    polymaff
    • #5
    • 7th Jul 17, 6:38 PM
    • #5
    • 7th Jul 17, 6:38 PM
    I asked a similar question at the end of my first, partial, tax year of state pension. Seven calls to DWP and HMRC produced seven different answers - none of which matched the pre-populated field - obviously wrong - in my online SA100

    Good Luck.
    Last edited by polymaff; 07-07-2017 at 6:45 PM.
    • jimmo
    • By jimmo 7th Jul 17, 8:18 PM
    • 1,879 Posts
    • 2,347 Thanks
    jimmo
    • #6
    • 7th Jul 17, 8:18 PM
    • #6
    • 7th Jul 17, 8:18 PM
    If its state pension then the tax is applied to the income in respect of when it's applicable. Not when its paid, so some, if not all will apply to the previous tax year.

    If it's a private pension it applies to the tax year in which it's paid, even if it is paid in arrears.
    Originally posted by dori2o
    Strictly speaking, in most cases, that's wrong but it is what happens in practice. If, for some reason, you would prefer to be assessed on the correct accruals basis you can insist that that happens.
    https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim74101
    However, if you do so, you need to bear in mind that HMRC are likely to insist that you remain on the accruals basis for the rest of your life. That will involve at least an annual round of correspondence or you having to complete Self Assessment every year.

    Similarly State Pension, in all its various form, is also assessable on the accruals basis but the practical difference is that the DWP supplies the "correct" accruals basis figures to HMRC using the Uprating Service.
    https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye76030

    For some, unfathomable to me, reason HMRC insist on using the strictly correct accruals basis for State Pensions but prefer to use the, incorrect, receipts basis for other pensions.
    Added to that, in the 4 or so years since I first received State Pension I have never been able to reconcile the DWP figures supplied to HMRC with my own calculations of my entitlement. In my personal experience HMRC will not budge unless you can persuade DWP to change their figures but trying to talk to someone at DWP who is able to change their figures has been impossible.

    Just not worth the hassle for me.
    • dori2o
    • By dori2o 9th Jul 17, 10:51 PM
    • 7,302 Posts
    • 12,195 Thanks
    dori2o
    • #7
    • 9th Jul 17, 10:51 PM
    • #7
    • 9th Jul 17, 10:51 PM
    The reason why they do it is because it's easier for the tax payer, and for pension providers when submitting PAYE details.

    I dont know of any pension provider who pays a monthly pension on either the 5th or the 6th of every month which would be the only way to ensure that what is due in the tax year is what is paid.

    Most pension providers usually pay on the first of the month, the last working day, or the 15th of the month.

    Because of the rules with State Pension the amount that accrues in the tax year (in the case of a full tax year) is 1wk at the old rate and 51weeks at the new rate.
    To equate judgement and wisdom with occupation is at best . . . insulting.
    • RADDERS
    • By RADDERS 10th Jul 17, 8:36 AM
    • 147 Posts
    • 131 Thanks
    RADDERS
    • #8
    • 10th Jul 17, 8:36 AM
    • #8
    • 10th Jul 17, 8:36 AM
    The reason why they do it is because it's easier for the tax payer, and for pension providers when submitting PAYE details.

    I dont know of any pension provider who pays a monthly pension on either the 5th or the 6th of every month which would be the only way to ensure that what is due in the tax year is what is paid.

    Most pension providers usually pay on the first of the month, the last working day, or the 15th of the month.

    Because of the rules with State Pension the amount that accrues in the tax year (in the case of a full tax year) is 1wk at the old rate and 51weeks at the new rate.
    Originally posted by dori2o
    Hubbys pension is paid on the 6th of every month, it is a DB pension.
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