State Pension Over-reporting by DWP to HMRC

Boodedoo

For the first State Pension payment into the bank each year from the DWP, my OH gets an amount equal to 2 weeks at the previous years rate and 2 weeks at the new rate for for the current tax year.
The subsequent 12 payments are at the new rate and don't vary. That all makes sense.

When DWP report the yearly figure as income to HMRC they calculate the annual figure as 13x the new rate - so are overstating his actual income by 2 weeks x the weekly increase . HMRC reduce his tax free allowance by this full amount and he pays tax on his company pension via PAYE.

HMRC say they 'cannot' alter the figure given to them by DWP and advise ringing them to enquire and get them to change it.
We have tried that, and it rings for a while then cuts off - repeatedly.

I assume this may affect just about retired person who pays tax and may, as is possible for my OH this year, just tip the scales into a higher rate band.

Other than snail mail does anyone know of another way to contact DWP? 

eskbanker

This comes up fairly regularly, for taxation purposes state pension income is based on calculated entitlement over the tax year, rather than what was actually received.

Edit: here's the relevant section of the Income Tax (Earnings and Pensions) Act 2003 defining this:

Taxable pension income

If section 577 applies, the taxable pension income for a tax year is the full amount of the pension, benefit or allowance accruing in that year irrespective of when any amount is actually paid.

https://www.legislation.gov.uk/ukpga/2003/1/section/578

Dazed_and_C0nfused

With State Pension you aren't taxed on what you receive, it's the entitlement that counts.

Marcon

Boodedoo said:

For the first State Pension payment into the bank each year from the DWP, my OH gets an amount equal to 2 weeks at the previous years rate and 2 weeks at the new rate for for the current tax year.
The subsequent 12 payments are at the new rate and don't vary. That all makes sense.

When DWP report the yearly figure as income to HMRC they calculate the annual figure as 13x the new rate - so are overstating his actual income by 2 weeks x the weekly increase . HMRC reduce his tax free allowance by this full amount and he pays tax on his company pension via PAYE.

HMRC say they 'cannot' alter the figure given to them by DWP and advise ringing them to enquire and get them to change it.
We have tried that, and it rings for a while then cuts off - repeatedly.

I assume this may affect just about retired person who pays tax and may, as is possible for my OH this year, just tip the scales into a higher rate band.

Other than snail mail does anyone know of another way to contact DWP? 

They won't change it because there's nothing to change - really unhelpful suggestion from HMRC. Maybe they'd do well to read the answers above and understand why the figures are actually correct!

Boodedoo

Thanks all. Have passed on the info and though we think its odd, accept that it is what it is. 

and to be fair to HMRC, the young man OH spoke to was very helpful and 'has' changed other figures from the P800 to match what was actually paid.