Annual State Pension Income

[Deleted User]

My HMRC online account is showing (what I consider) an incorrect figure for my SP income. It would appear that DWP are informing HMRC of my SP as the current rate for 19-20 tax year X 52. However, the first amount I actually received on 10th April 20 is based on last year's rate, so according to my calculation, total SP income should be current rate X51 + 1 week at last year's rate.

When I was working, and received a salary increase, my P60 did not show that I received an income of the increased amount X 52. It always showed the total of actual amount paid

Before I phone them up, can someone please tell me if my thinking is correct.

Silvertabby

Your annual State pension is 52.17 x your weekly pension.

[Deleted User]

Silvertabby wrote: »

Your annual State pension is 52.17 x your weekly pension.

Sorry - that's even more confusing. I can understand DWP using 52 X weekly pension, buy why 52.17??

badmemory

The DWP seem to be incapable of notifying HMRC of the correct figure & do indeed notify 52 weeks at the new rate instead of 51 weeks at the new rate & 1 at the old. They also can't cope with 53 payments in the occasional tax year. Hopefully (unless I decide to be honest) that will save me over £50 next year.



Well they were the ones who said they knew better than me and insisted I stop doing self assessment. So far their "accurate" figures for interest have been less than a third what they should have been. It is taking both me & HMRC longer to correct their figures than it ever did for me to file SA.

badmemory

Silvertabby wrote: »

Your annual State pension is 52.17 x your weekly pension.

For once I am going to disagree with you. State pension for tax purposes is accrued re the payment day. Paid on a Friday & there are 52 Fri in the year then 52 weeks, usually one at old & 51 at new due to the date the increase is paid from which is never the 6th. Paid on a Friday & there are 53 Fri in the year then 53 weeks, usually one at old & 52 at new.

[Deleted User]

badmemory wrote: »

The DWP seem to be incapable of notifying HMRC of the correct figure & do indeed notify 52 weeks at the new rate instead of 51 weeks at the new rate & 1 at the old. They also can't cope with 53 payments in the occasional tax year. Hopefully (unless I decide to be honest) that will save me over £50 next year.



Well they were the ones who said they knew better than me and insisted I stop doing self assessment. So far their "accurate" figures for interest have been less than a third what they should have been. It is taking both me & HMRC longer to correct their figures than it ever did for me to file SA.

Thank you for your reply. It would appear that DWP are reporting an incorrect figure to HMRC and consequently, all pensioners are paying a higher amount of tax. Admittedly a very small amount but why shouldn't we insist on paying the correct amount due.

molerat

I thought for tax purposes the pension is different to other income and is declared for when it is due not when it is paid so you cannot have a previous year amount in that calculation.

[Deleted User]

molerat wrote: »

I thought for tax purposes the pension is different to other income and is declared for when it is due not when it is paid so you cannot have a previous year amount in that calculation.

It would appear that this is the principal that DWP are adopting, but how does it make it correct. It seems to me that you are paying tax on an incorrect amount of pension income.

molerat

Not really incorrect, just different.

[Deleted User]

molerat wrote: »

Not really incorrect, just different.

But is that difference leaning towards the correct or incorrect side of paying the correct amount of tax

Silvertabby

[quote=[Deleted User];75916596]Sorry - that's even more confusing. I can understand DWP using 52 X weekly pension, buy why 52.17??[/QUOTE]

Because just 52 x 7 = 364.

52.17 x 7 = 365.19, being the average of 3 normal years and one leap year.

I understand what badmemory is saying, and even this 52.17 would be subject to tweeking depending on the actual paymment day, but it is the formula for working out the annual State pension.