GOV PENSION WOMENS REFUND

iow74

Aaah got it NedS--   that makes a lot more sense as long as the council accept the premis -- thanks 

calcotti

NedS said: You need to determine your tax liability so you can make a rational argument how much NET income as a lump sum you have received. Tax is your responsibility, not that of HMRC's who are only responsible for collecting it. Work out how much tax is due on the lump sum for each tax year in question, pay the tax due to HMRC and go from there. 

The responsibility of OP is to report required information to HMRC. I would expect HMRC to workout the tax liability.

kaMelo

I know the OP talks about being liable for tax on the payment but will she really be liable for income tax?
As noted earlier by DazedandConfused, it will not be taxed as a lump sum, it will be treated by HMRC as if the pension was paid in the year it should have been, taxable at the prevailing rate only on the last four years and any backpayment relating to earlier years are tax free. 

This is about a historic underpayment to women who under the old rules were entitled to 60% of their husbands basic (not including SERPS/SSP enhancement) pension which at last years rates this was a maximum £80.45 per week. The personal allowance was £12,500 so unless they had other income over about £8,500 last year they would not be liable for tax at all.

Interestingly, whilst having a nosey about whether the state pension is classed as a benefit and bearing in mind what Calcotti said about some benefits being taxable I came across this which clearly lists the state pension as a taxable benefit..
https://www.gov.uk/income-tax/taxfree-and-taxable-state-benefits

So who knows.

I actually think the OP is worrying themselves unnecessarily.
Moving forward your wife will have an enhanced pension for the rest of their lives which is surely a good thing. Tax, if due, will only be paid at the same rate as if she had been receiving the pension correctly and any over four years old are tax free so she's no worse off and potentially a lot better off.
If the council determine an overpayment of help because of this then. like tax, surely they can only take it into account as if she'd been receiving it as she should have and work out entitlement for previous years accordingly so you're in the same position as what you should have been.  

I cannot envisage a way in which you will be worse off but many in which you will be better off.

calcotti

State Pension is definitely taxable but, as you say, whether or not there is any tax liability will depend on circumstances.