Paying tax on state Pension.

ipri

Hi...I have just received notice of my upcoming S. Pension. It says HMRC will be informed how much I will get. Does this mean they will tax it ....or do I still have to call them? Thanks.

Alter_ego

It's not usually taxed directly, if you have other income they tax that if neccessary. No need to contact HMRC

tanith

I get notification of how much tax I pay with my NHS pension paperwork so I don't need to do anything they take the tax from that pension...
I think the personal allowance is around £10,300 so anything above that is taxed

DancingBadger

Personal allowance is £10,000 for 2014/15, rising to £10,600 for the 2015/16 tax year.

purdyoaten

There is no mechanism to collect tax on the state pension (or any other benefit for that matter). Any additional tax payable as a result of this new source of income is collected by a restriction in the personal allowances at any other source of income, thereby paying more tax at that other income.

The personal allowance is currently 10000, with a proposal to be 10600 from April.

xylophone

If I were you, I'd check that your income is being correctly taxed - there have been mistakes reported and you would not wish to find yourself over or under taxed.

If you continue to work after state pension age, you should not pay NI - it is worth checking that there is no such deduction if you are in this position.

http://www.dailymail.co.uk/news/article-2914642/Backdated-2-000-tax-bill-HMRC-errors-hit-pensioners.html

A relative of mine had her own occupational pension, a widowed spouse pension and a state pension - there was a lot of correspondence with HMRC to get the tax codes correct......

https://www.gov.uk/tax-national-insurance-after-state-pension-age/calculating-national-insurance-and-tax

JezR

The ones that are most inconvenienced are those with significant second state pensions, but no other, or only small other pensions. In theory they need to do self assessment, but in reality HMRC these days does manage to send out a demand within about a year.