Income tax and pensioners

Easyjet77

dog_nanny said:

Thanks for all the replies. I'll just wait and see what happens later next year. Mum's not hard up but she'll probably be very annoyed if she does get a tax bill, no matter how small!

She'll be annoyed that her income is so large , she may have to contribute a small amount of tax? We all have to pay our dues when liable, some more so than others unfortunately. 

badmemory

As long as HMRC have the correct address & the post is not ignored a person would be told.  These days self assessment is rarely about someone with conventional non-self-employed circumstances.  Just check HMRCs figures carefully.  I have found it easier to work out how much tax I owe & then check to see where we disagree.

badmemory

Bookworm105 said:

and your point is? The onus is still on each taxpayer to manage their own tax affairs and notify HMRC accordingly.

I wish this were actually true. 
I used to file self assessment until they invented simple assessment.  I have been told that if I file self assessment they will ignore it, so not to notify HMRC accordingly then.  My taxable-at-source income is not enough to pay my income tax due, so I get a simple assessment bill in the summer after the end of the tax year which is payable by the end of the following January.  I suspect that each year there will be more and more that are in the same situation.  My only income is from pensions like many other pensioners.

CouldntResist

badmemory said:

Bookworm105 said:

and your point is? The onus is still on each taxpayer to manage their own tax affairs and notify HMRC accordingly.

I wish this were actually true. 
I used to file self assessment until they invented simple assessment.  I have been told that if I file self assessment they will ignore it, so not to notify HMRC accordingly then.  My taxable-at-source income is not enough to pay my income tax due, so I get a simple assessment bill in the summer after the end of the tax year which is payable by the end of the following January.  I suspect that each year there will be more and more that are in the same situation.  My only income is from pensions like many other pensioners.

Being in Simple Assessment presumably doesn't take away your responsibility to let them know if it is incorrect?

badmemory

CouldntResist said:

badmemory said:

Bookworm105 said:

and your point is? The onus is still on each taxpayer to manage their own tax affairs and notify HMRC accordingly.

I wish this were actually true. 
I used to file self assessment until they invented simple assessment.  I have been told that if I file self assessment they will ignore it, so not to notify HMRC accordingly then.  My taxable-at-source income is not enough to pay my income tax due, so I get a simple assessment bill in the summer after the end of the tax year which is payable by the end of the following January.  I suspect that each year there will be more and more that are in the same situation.  My only income is from pensions like many other pensioners.

Being in Simple Assessment presumably doesn't take away your responsibility to let them know if it is incorrect?

No it doesn't & so far it always has been incorrect.  This is why whenever it gets mentioned I say check it carefully.  That is why I asked them if I could go back to self assessment & was told they would ignore it.  I always do my own version of self assessment as it is far easier to do than it is to check.  I suspect one year soon it will be very incorrect as it all depends on the due date of state pensions & how many payments you may be entitled to in a year, because every few years have 53 due payments for the year, which on the new state pension will be an extra over £40 for the year.

You would expect things like this to become easier when you retire but they don't.

jem16

badmemory said:

As for the correct state pension figure.  Most years this is made up of one week at the old rate & 51 weeks at the new.  DWP usually notify 52 weeks at the new.  It doesn't sound much different does it.  But if your state pension is enough to pay tax on on its own then it is over £200.  10% increase is £20 which is £4 in tax that would not actually be due.  I believe in paying every penny due but not a single penny that isn't

Last tax year and this tax year, the amount used in my tax code is 51 weeks of new and one week of old which is correct for most years.

I took a Quick Look at my SA for 2023/24 and the figure pre-populated for the state pension was 51 weeks of new and one week of old. Unfortunately that is incorrect as 2023/24 was a 53 week payment so I’ve had to amend the figure to be correct. HMRC community forum couldn’t even give me the same answer from all of their HMRC Admin. 

RG2015

The BBC has joined in today with the following headline.

Pensioners' fears over income tax burden

https://www.bbc.co.uk/news/articles/cz74yw87jygo

Jeremy535897

Albermarle said:

dog_nanny said:

Thanks for all the replies. I'll just wait and see what happens later next year. Mum's not hard up but she'll probably be very annoyed if she does get a tax bill, no matter how small!

Many people are over sensitive about tax, and we see posters making poor financial decisions just to avoid small amounts of tax .
Maybe tell your Mum she is only having to pay a bit in tax, because her pension has gone up so much in the last couple of years. It is not strictly true as the freezing of personal allowances has played its part as well, but perhaps do not remind her of that and she may be less annoyed !

Since the pension has only increased in line with inflation, the fact that tax is now payable due to frozen allowances equates to a real cut in income.

Grumpy_chap

Jeremy535897 said:

Albermarle said:

dog_nanny said:

Thanks for all the replies. I'll just wait and see what happens later next year. Mum's not hard up but she'll probably be very annoyed if she does get a tax bill, no matter how small!

Many people are over sensitive about tax, and we see posters making poor financial decisions just to avoid small amounts of tax .
Maybe tell your Mum she is only having to pay a bit in tax, because her pension has gone up so much in the last couple of years. It is not strictly true as the freezing of personal allowances has played its part as well, but perhaps do not remind her of that and she may be less annoyed !

Since the pension has only increased in line with inflation, the fact that tax is now payable due to frozen allowances equates to a real cut in income.

I thought this year the SP had risen in line with wages, not inflation.
AIUI, it was inflation last year (higher than wage rises) but this year wage rises are now following the lag and therefore higher than inflation. 

sheramber

https://www.thetimes.co.uk/money-mentor/pensions-retirement/state-pension/pensions-triple-lock

How much will the state pension rise by in 2024?

The CPI inflation figure used in the triple lock is released in October and was 6.7%, while the wage growth element came out in September and was 8.5%.

That means that the state pension will increase by 8.5% in April 2024, meaning: