Taxing of State Pension

KevinG

Well that's amazing, I've just followed ColdIron's link https://www.manage-state-pension.service.gov.uk and changed to weekly payments, makes much more sense than the awkward 4-week cycle and simplifies the tax return (in my head at least).

pinnks

Well done but it won't change your tax return as you are still required to return your entitlement.

KevinG

pinnks said:

Well done but it won't change your tax return as you are still required to return your entitlement.

Yes, I am well aware of that, but it solves the problem described in my original post as the entitlement and the payments will now match.

Dazed_and_C0nfused

KevinG said:

pinnks said:

Well done but it won't change your tax return as you are still required to return your entitlement.

Yes, I am well aware of that, but it solves the problem described in my original post as the entitlement and the payments will now match.

Not quite. 

As the recipient of the new State Pension your tax code (in years after the first tax year you receive it) will normally include a very slightly reduced amount to reflect the fact that the entitlement for the first week of the tax year is at the old, previous tax years, rate.

https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye76030

KevinG

Dazed_and_C0nfused said:

KevinG said:

pinnks said:

Well done but it won't change your tax return as you are still required to return your entitlement.

Yes, I am well aware of that, but it solves the problem described in my original post as the entitlement and the payments will now match.

Not quite. 

As the recipient of the new State Pension your tax code (in years after the first tax year you receive it) will normally include a very slightly reduced amount to reflect the fact that the entitlement for the first week of the tax year is at the old, previous tax years, rate.

https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye76030

Yes, I know, but that will all be taken into account when I report the amount of pension I have actually received, since one week of that will be at a different rate.

pinnks

The amount you "receive" is irrelevant.  Your entitlement is the amount from the first payment week that ends in the tax year at the old rate, i.e. the first week that ends after 5 April and before the annual pension increase, and the final week at the new rate that ends before the following 6 April.  Whether you receive your payments weekly, or 4-weekly, makes no difference to the amount to which you are entitled in a tax year.  

Qyburn

pinnks said:

The amount you "receive" is irrelevant.  Your entitlement is the amount from the first payment week that ends in the tax year at the old rate, i.e. the first week that ends after 5 April and before the annual pension increase, and the final week at the new rate that ends before the following 6 April.  

Right, so focusing just on that first week - your entitlement is a week at last year's rate but you are saying that's different to what you receive. What will you receive?

KevinG

pinnks said:

The amount you "receive" is irrelevant.  Your entitlement is the amount from the first payment week that ends in the tax year at the old rate, i.e. the first week that ends after 5 April and before the annual pension increase, and the final week at the new rate that ends before the following 6 April.  Whether you receive your payments weekly, or 4-weekly, makes no difference to the amount to which you are entitled in a tax year.  

Yes, again, I know, but the point is that changing to weekly payments means that the amount I receive and the amount I am entitled to will be the same. 

KevinG

Qyburn said:

pinnks said:

The amount you "receive" is irrelevant.  Your entitlement is the amount from the first payment week that ends in the tax year at the old rate, i.e. the first week that ends after 5 April and before the annual pension increase, and the final week at the new rate that ends before the following 6 April.  

Right, so focusing just on that first week - your entitlement is a week at last year's rate but you are saying that's different to what you receive. What will you receive?

On weekly payments the two amounts will be the same. 

pinnks

KevinG said:

pinnks said:

The amount you "receive" is irrelevant.  Your entitlement is the amount from the first payment week that ends in the tax year at the old rate, i.e. the first week that ends after 5 April and before the annual pension increase, and the final week at the new rate that ends before the following 6 April.  Whether you receive your payments weekly, or 4-weekly, makes no difference to the amount to which you are entitled in a tax year.  

Yes, again, I know, but the point is that changing to weekly payments means that the amount I receive and the amount I am entitled to will be the same. 

Indeed, so why bother changing unless you specifically want a weekly income.  Some people do - personal choice...