HMRX Tax on Government Pensions for full year when only started receiving pension 4 months ago

Cheshire_Lion

[Deleted User] said:

Cheshire_Lion said:

TheSpectator said:

A complete waste of time HMRC putting explanatory notes on the coding notices it seems.

This erroneous assumption not only contradicts HMRC's explanation, but has knock on implications for the next tax year when HMRC will want to claw back tax that simply isn't owed.

None of that is correct and simply reflects a misunderstanding as to how the system operates. 

Err, how can you say it’s incorrect when (1) HMRC are telling me I owe tax calculated on the basis that I have received a full year’s state pension; and (2) HMRC have been unable to reassure me that they won’t be clawing this back in the next tax year? My post is based on actual conversations with HMRC, and what I have been told by them. Perhaps it’s HMRC reps who haven’t a clue how their system operates?

Dazed_and_C0nfused

Cheshire_Lion said:

TheSpectator said:

A complete waste of time HMRC putting explanatory notes on the coding notices it seems.

The problem isn't the explanatory note, or the fact that receipt of state pension can impact tax codes and personal allowances. It's the fact that HMRC doesn't act in accordance with its own explanation.

The explanatory note says "we know you won't receive the full amount (of State Pension) this year". Yet HMRC's estimate of my tax for the current tax year as stated in my personal tax account is based on the assumption that I will receive the full amount this year, even though I haven't. This erroneous assumption not only contradicts HMRC's explanation, but has knock on implications for the next tax year when HMRC will want to claw back tax that simply isn't owed.

I thus have every sympathy with the original poster, and the unnecessary stress caused by HMRC's unacceptably contradictory behaviour.

What evidence do you have for the bit highlighted in bold?

Including the annual amount of pension but issuing the new code on a non cumulative basis has been happening for time immemorial.

https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye76086

Just because some people cannot understand what is happening doesn't mean it produces the wrong outcome.

TheSpectator

Cheshire_Lion said:

TheSpectator said:

Cheshire_Lion said:

TheSpectator said:

A complete waste of time HMRC putting explanatory notes on the coding notices it seems.

The problem isn't the explanatory note, or the fact that receipt of state pension can impact tax codes and personal allowances. It's the fact that HMRC doesn't act in accordance with its own explanation.

The explanatory note says "we know you won't receive the full amount (of State Pension) this year". Yet HMRC's estimate of my tax for the current tax year as stated in my personal tax account is based on the assumption that I will receive the full amount this year, even though I haven't. This erroneous assumption not only contradicts HMRC's explanation, but has knock on implications for the next tax year when HMRC will want to claw back tax that simply isn't owed.

I thus have every sympathy with the original poster, and the unnecessary stress caused by HMRC's unacceptably contradictory behaviour.

Perhaps read the remainder of the message and not partially quote.

Quite simply, you are wrong.

Firstly, I quoted all your message so what’s your problem? Secondly, please explain why I’m wrong. Thirdly, you wouldn’t be making your unsubstantiated “you are wrong” statement if you’d listened in to the several calls I have had with HMRC. 

I meant the remainder of the tax coding explanation which goes actually says "Although we have shown the eatimated state pension for the full year, we know you won't receive the full amount this year. We have adjusted your tax free allowance so you will only pay tax on the amount you actually receive."

You omitted the bolded section in your post but it seems that despite numerous people trying to explain it you will not get the difference between a cumulative and non-cumulative tax code.

[Deleted User]

Dazed_and_C0nfused said:

Cheshire_Lion said:

TheSpectator said:

A complete waste of time HMRC putting explanatory notes on the coding notices it seems.

The problem isn't the explanatory note, or the fact that receipt of state pension can impact tax codes and personal allowances. It's the fact that HMRC doesn't act in accordance with its own explanation.

The explanatory note says "we know you won't receive the full amount (of State Pension) this year". Yet HMRC's estimate of my tax for the current tax year as stated in my personal tax account is based on the assumption that I will receive the full amount this year, even though I haven't. This erroneous assumption not only contradicts HMRC's explanation, but has knock on implications for the next tax year when HMRC will want to claw back tax that simply isn't owed.

I thus have every sympathy with the original poster, and the unnecessary stress caused by HMRC's unacceptably contradictory behaviour.

What evidence do you have for the bit highlighted in bold?

Including the annual amount of pension but issuing the new code on a non cumulative basis has been happening for time immemorial.

https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye76086

Just because some people cannot understand what is happening doesn't mean it produces the wrong outcome.

Week 1 Inland Revenue (HMRC) training - coding state pensions.