Tax shown on pension paid into bank

Descrabled

I notice that the amount of tax paid (TAX 000000xxx) is provided on all pension payments received from government pensions, in particular for NHS and teachers pensions.

Additionally all DWP benefits (AA, DLA, SP, COL) are explicitly identified. No tax is deducted although SP is taxable.

My private company pensions have no tax deduction showing but are easily identifiable as pensions.

The bank could easily calculate how much tax (20%) and how much benefits I am receiving, although in my case there would need to be collusion between LBG, HSBC, and Cumberland.

Do we know why the government pensions provide this information with every payment?

Maybe it helps the banks "know their customer".

I'm not complaining; just interested.

Devongardener

This is confusing. Banks have nothing to do with tax calculations or collection.   If you have income from multiple pensions which are in excess of the basic personal tax allowance, HMRC will be receiving the details and should issue tax codes accordingly.

Descrabled

The bank statement clearly states "NHS TAX xxx.xx" as the payment item against the net amount added to the account. It does not, however, give the identity of the recipient. The amount of monthly PAYE tax is correct. I can see Ms Descrabled payment as she can see mine for we use (different) joint accounts.

The DWP include the NI number together with the payment type (SP for state pension) but not the name of the recipient; so "SP AAxxxxxxA" as the BACS payment.

Obviously the information is provided by the government pension/benefit provider in the BACS transfer.

I know that the bank has nothing to do with the collection of tax but the information is clearly given on the statements. The bank statement is an easy method of finding a NI number when needed.

Flugelhorn

the NHS pensions do this - presume it saves them having to send us a "payslip"  each month - they only send th P60 and the advice of next year's pension. handy to be able to see how much tax has been taken as can check the sums etc 

molerat

I have had this on my pension payments since 1994, nothing new.  I was informed in the paperwork I received on commencement of the pension and it stated I could have the tax bit removed if I requested it.  I very much doubt that the bank, or anyone else for that matter, are interested in how much tax is being deducted.  The NI number for state benefits could be useful to someone if your post is intercepted I suppose - brings an interesting view to another thread here about LBG stopping postal statements !