Self Assessment and the State Pension

polymaff

HMRC tell us that you can get details needed to fill in a self-assessment return by asking The Pension Service "for a BR735 'Statement of Pension' form for the period 6 April 2015 to 5 April 2016."

I've done this, and received a one-sheet reply:

About your State Pension
____________________

Dear Mr Polymaff

Please find below details of your State Pension

State Pension from 09/12/2015; to 12/04/2016; No. of weeks: 18; No. of Days: 0; Weekly Amount £117; Total Paid: £2106

The form isn't called 'Statement of Pension', it isn't identified as a BR735 - and it doesn't cover " the period 6 April 2015 to 5 April 2016.". That's partly OK because my pension started mid-tax year - but it includes a date in FY16/17 in which I received a payment.

So, was it a BR735? Is it the correct figure? (HMRC have, over the past three weeks, suggested five different figures I should use - of which this figure is one). Is there a more appropriate way in which one can get a definitive statement?

This should be SO straightforward.

Dazed_and_confused

Are there any typos in the bit of your post which is in italics?

polymaff

Dazed_and_confused wrote: »

Are there any typos in the bit of your post which is in italics?

Yes, sorry, weeks corrected from 10 to 18.

jimmo

It should be easier than this but it isn’t.
State Pension is chargeable to tax on the accruals basis i.e the amount you are entitled to in the tax year.
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim74101
If, like me, you are paid 4-weekly in arrears I believe that for the payment you received on 12 April you were entitled to 3 weeks for 2015/16 and 1 week for 2016/17. That clearly doesn’t marry up with what The Pension Service have told you.
On searching for BR 735 on the gov.uk web site I got only one hit.
https://www.gov.uk/hmrc-internal-manuals/self-assessment-manual/sam121530
That suggests to me that BR 735 is an obsolete form and it is reasonable to assume that the letter you got from The Pension Service is the modern-day equivalent.
I am not in SA myself so for me HMRC have relied entirely on the information provided to them by The Pension Service. I have never been able to fully reconcile The pension Service figures with what I believe to be taxable but the difference has been so small that I didn’t think it worth my while to challenge the Pension Service about their reports to HMRC.
For you the difference appears to be about £117 in State Pension so £23.40 in tax (£46.80 if you an HR payer) and, because you are in SA you are perfectly entitled to declare the amount you believe to be taxable. HMRC are, of course, perfectly entitled to “repair” your Return if they so wish but, reading the relevant part of the second link above, it seems rather unlikely that they will bother.
However the one thing I would suggest you look to avoid is having this as an ongoing issue for the rest of your days.
For future years the difference between your figures and The Pension Service figures is going to be up to 3 weeks worth of the annual State Pension increase. At current levels that’s less than £10 in income and £2 (or £4) in tax.

badmemory

I don't know if this will help but I have been dealing with my state pension through SA for 5 years now & always use the amount that I would have received in any tax year if it had been paid weekly. My reasoning for this - I received my first 4 weekly payment 2 weeks into the new tax year, I then received a bill from HMRC for the tax on 2 weeks of the pension that fell in the old tax year. I have been told that if you file online that it populates this figure for you but you do need to check it.

polymaff

jimmo wrote: »

It should be easier than this but it isn’t.
State Pension is chargeable to tax on the accruals basis i.e the amount you are entitled to in the tax year.
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim74101
If, like me, you are paid 4-weekly in arrears I believe that for the payment you received on 12 April you were entitled to 3 weeks for 2015/16 and 1 week for 2016/17. That clearly doesn’t marry up with what The Pension Service have told you.
On searching for BR 735 on the gov.uk web site I got only one hit.
https://www.gov.uk/hmrc-internal-manuals/self-assessment-manual/sam121530
That suggests to me that BR 735 is an obsolete form and it is reasonable to assume that the letter you got from The Pension Service is the modern-day equivalent.
I am not in SA myself so for me HMRC have relied entirely on the information provided to them by The Pension Service. I have never been able to fully reconcile The pension Service figures with what I believe to be taxable but the difference has been so small that I didn’t think it worth my while to challenge the Pension Service about their reports to HMRC.
For you the difference appears to be about £117 in State Pension so £23.40 in tax (£46.80 if you an HR payer) and, because you are in SA you are perfectly entitled to declare the amount you believe to be taxable. HMRC are, of course, perfectly entitled to “repair” your Return if they so wish but, reading the relevant part of the second link above, it seems rather unlikely that they will bother.
However the one thing I would suggest you look to avoid is having this as an ongoing issue for the rest of your days.
For future years the difference between your figures and The Pension Service figures is going to be up to 3 weeks worth of the annual State Pension increase. At current levels that’s less than £10 in income and £2 (or £4) in tax.

Thanks, Jimmo. I had wondered if the form is obsolete, but it is mentioned in the latest SA150:

https://www.tax.service.gov.uk/information/help?helpcategory=selfAssessmentFiling1516&affinitygroup=&helpid=statePensionHelp

It took three attempts to get DWP to recognise the term BR735 - which is also evidence of its possible non-existence. The odd thig, though, is that these "forms" we've sent me have no ID at all.

There is a tax-related issue which means I need to know exactly how much is being assessed this year - otherwise I'd not query the 18-week figures until next year when I drop - DV - onto the standard regime. Mind you, even then it might be difficult to know what is what as some HMRC manuals state that all full-year assessments are based on 52 weeks - whereas in other places they comment on 53-week cases. SNAFU!

polymaff

badmemory wrote: »

.... . I have been told that if you file online that it populates this figure for you but you do need to check it.

It does - but in both our cases the figure they've inserted is the weekly rate - even though they are asking yu to enter the yearly figure.

And before you ask, if you leave their figure in place and proceed through the assessment to the SA302, they don't do the calculation that would scale this up to the annual figure!