State pension/tax allowance

luvchocolate

Just a thought if state pensions increase as expected next year,  anyone with a deffered amount with no private pension could be over the now frozen tax allowance, and tax is not taken from state pension. 
Doesn't affect me as I have a works pension which is taxed. Just curious what would happen 🤔 

molerat

They would need to pay any tax owed. HMRC will be informed of the SP amount, do the sums..  They would then contact you asking you to pay up / complete a SA.  There are likely many pre 2016 pensioners in this situation -  a pre 2016 pensioner could currently be getting up to £17K

Dazed_and_C0nfused

Self Assessment is no longer used for people who end up in this scenario (existing people may contribute but not new ones).

HMRC have introduced a sort of hybrid system called Simple Assessment.

They will issue a calculation, like they would when extra tax is owed under PAYE, but you have the right to appeal against a Simple Assessment if something is wrong with it.

Instead of getting a P800 calculation you would get a PA302.

A K code would only be issued if there was a company or private pension as well.  Although sometimes the extra pension is to small to allow the tax due to be paid during the year so a Simple Assessment will still be needed.  For example State Pension £17,000 and company pension £1,000 means only £500 of the £500 tax due could be paid during the year (50% of the income paid under PAYE).