Income Tax and Pensions

When completing one's SA tax return online, the state pensions box is usually pre-populated with the annual amount evidencing that there must be some level of communication between HMRC and DWP. However, that communication appears non-existent in respect of the year in which one's state pension first becomes payable. The net result is that no restriction is entered in one's tax code number which leads to an underpayment of tax. I realise that the public sector have severe problems understanding the meaning of "customer service" but does anyone know why HMRC and DWP can't get their act together on this matter?

Replies

  • german_keepergerman_keeper Forumite
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    It's probably down to "efficiency savings". You may well have voted for it in 2010. 

  • AlbermarleAlbermarle Forumite
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    but does anyone know why HMRC and DWP can't get their act together on this matter?

    The lack of integration between HMRC, DWP is a well known issue . Partly caused by complicated ever changing rules /legislation and partly by under resourcing and no doubt IT issues play a big part.

  • edited 30 July 2020 at 6:10PM
    sherambersheramber Forumite
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    edited 30 July 2020 at 6:10PM
    When you complete your tax return the year has finished and the amount in the return is the amount  that has been paid.
    For the first year  DWP used  to notify HMRC of the amount payable when it started to be paid. The code number was amended at that stage to collect tax due for the rest of the year
    I don't know if they still do.
  • edited 30 July 2020 at 10:15PM
    moleratmolerat Forumite
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    edited 30 July 2020 at 10:15PM
    sheramber said:
    For the first year  DWP used  to notify HMRC of the amount payable when it started to be paid. The code number was amended at that stage to collect tax due for the rest of the year
    I don't know if they still do.
    They still do it. They make a complete dogs breakfast of it and won't listen but they still do it :(

  • Mutton_GeoffMutton_Geoff Forumite
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    You can inform HMRC of changes to you income at any time and they'll issue a new tax code. If the tax due is less than £3000, they can collect it over the following year via an amended code but to pre-empt income changes, just tell them ..

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  • moleratmolerat Forumite
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    They had my correct SP first part year amount and both my other income streams correct but still couldn't figure out the  code to collect the correct amount of tax.  They would not allocate the code I suggested because ....... the computer says.  I will leave you to guess which one of us was correct !
  • mark55manmark55man Forumite
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    I think I prefer taking responsibility for my tax affairs rather than trusting some magical number that as molerat suggests is a figment of some programmer's imagination.  it shouldn't be a surprise and therefore as you will have been putting money aside it shouldn't be a problem
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