Too much tax on state pension

artaylor

Not sure if anyone can provide a little advice but here goes.

I will be using round figures rather that figures that apply directly.

In the tax year 2017-18 I received a pension, earned income from a job and started to draw my state pension.

I mistakenly believed that HMRC were aware of this and would have taxed me appropriately but they didn’t.

That aside, I realise that I need to pay tax on my state pension and this extra income pushed my up into 40% tax bracket for some of my total income for the tax year 2017-18.

My state pension was paid at an amount that has subsequently found to be incorrect by DWP and that have refunded me the underpayment and paid it to me in November 2018 which in the following tax year.

My income now is such that I am in a 20% tax liability year.

I have received three letters from HMRC which indicate that my state pension has increased by various amounts to £600 as I said this was paid to me in Nov 2018.

However HMRC are saying that they have calculated the tax I owe on this increased payment inflated now by £600 and I calculate that they are demanding £250 more tax as I was in a 40% tax year.

I have statements that prove what was paid into my bank account.

HMRC seem to be able to increase tax liability on what DWP should have paid me rather than what was paid to me.

As I said I realise that I have to pay tax on my state pension but to demand payments on the amount that should have been paid to me rather than what I received seem totally wrong especially I was not aware of any underpayment.

antrobus

Arrears of benefit may be paid in a lump sum. The arrears are chargeable for the year or years of assessment to which they relate.
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim76005

artaylor

Thanks Antrobus :-(.