SA - State pension entry

djblack

Hi Guys

Sorry for asking a dumbo question.... I am completing my Mother's tax return, and "stuck" with what I enter in the UK Pensions box 7.

She is widowed, and received the state pension into her bank.

Has this amount already had tax deducted?

If I look at the amounts over the tax year, it does not add up to the full amount the government website states it is... why would that be?

Many thanks in advance for the help.

David

patanne

No tax is not deducted at source on a state pension so she may well owe some tax on that. Do you mean it adds up to more or less. If less then it could be that the number of years contributions was not enough for the full pension. If it is more then that could be down to graduated pension or S2P earned with her contributions. Before the increase in April each year they send out a letter saying how much it will be & how it is broken down. Perhaps it would be a good idea to look for that (Mar 2013 for the tax year just finished). If she has a private pension the tax code on that may well have been adjusted to pay the tax due on her SP. She may well have received a form P2 from HMRC which should explain how that has been done (if it has).

ETA if she has got a P2 then use the state pension figure on that for the SA

djblack

patanne wrote: »

No tax is not deducted at source on a state pension so she may well owe some tax on that.

Many thanks for the speedy reply - it is very, very much appreciated.

The amount she is paid is a few hundred less than the published annual amount, so you are probably right re the entitlement.

Best regards

David

patanne

If she was married it is possible to make it up to the full amount (and more) using a deceased husbands contributions. You are not comparing this years state pension from the website with last years are you as there is a 2.7% difference (approx). Is she getting non-taxable attendance allowance? If she has had to go in a residential care home she will be entitled & usually at the highest rate.

ETA I hope you don't think my questions are too intrusive but nobody ever tells you what you can get and the AA made a big difference to the rate at which my mothers savings disappeared.

booksurr

have you read the guide on how to complete a tax return?

the amount you declare as pension income on the tax return may NOT be the same as the total cash received in the bank because of the way in which the tax year dates work, ie the return uses an apportioned figure

all explained here:
https://www.hmrc.gov.uk/worksheets/sa150.pdf
"Box 7 State Pension
We consider the ‘full amount’ of State Pension you were entitled to for the year to 5 April 2014, to work out any tax due. Because your total State Pension entitlement is paid in arrears (weekly, 4-weekly or quarterly) it is unlikely to be the same as the actual payments you received in the year to 5 April 2014."

patanne

What booksurr wrote is why I suggested that you find the P2 for the appropriate year. That will also give you a basis to calculate the future years SP

djblack

patanne wrote: »

If she was married it is possible to make it up to the full amount (and more) using a deceased husbands contributions. You are not comparing this years state pension from the website with last years are you as there is a 2.7% difference (approx). Is she getting non-taxable attendance allowance? If she has had to go in a residential care home she will be entitled & usually at the highest rate.

ETA I hope you don't think my questions are too intrusive but nobody ever tells you what you can get and the AA made a big difference to the rate at which my mothers savings disappeared.

Hi

I am not aware of anything she has been given from the state pension in the way of a statement, or at least she has never told me of it!

She was widowed many years ago, and no other payments have been made as far as I know.

Booksurr's statement, even though I read it before (and yes, I DID read the guide...:D) may answer it.

Perhaps next year I pay someone to do it!


Thanks guys

David

agrinnall

There would only ever be tax due on state pension if her total personal allowance available for earnings in the year in question had been reduced to less than the SP annual total.

This would really only be the case if she owed tax from previous years or still works and has some sort of benefit in kind to be allowed for.

I suppose it might be possible that she could also be in receipt of some sort of other taxable benefit that could mean that total benefits are above the personal allowance, but if that was the case I'm not sure whether there is a hierarchy of benefits that the DWP maintains that would allow tax to be withheld or if it would just have to be sorted out in SA.

But overall, for most pensioners there is no tax to be paid on SP payments, so the only issue is to get the amount correct when completing the SA. As patanne says she will have received a letter in March 2013 that explains what the following year's total payment will be - like you I do my mum's return and we always have to hunt a bit to find that letter because it's really the only thing (along with any pre-tax year P2s) that's dated before the start of the tax year.

zygurat789

djblack wrote: »

Many thanks for the speedy reply - it is very, very much appreciated.

The amount she is paid is a few hundred less than the published annual amount, so you are probably right re the entitlement.

Best regards

David

Always remembering that state pension is not paid monthly but 4 weekly ie 13 times in a year.