Have HMRC made a booboo ?

MouldyOldDough

I have just received last years tax statements (P60's) for my pensions and believe that HMRC have made a mistake

My online tax shows

Your PAYE Income Tax summary for 6 April 2025 to 5 April 2026

using last years figures (2024-2025)

This years are 1.7% higher

is this normal ?

[Deleted User]

MouldyOldDough said:

I have just received last years tax statements (P60's) for my pensions and believe that HMRC have made a mistake

My online tax shows

Your PAYE Income Tax summary for 6 April 2025 to 5 April 2026

using last years figures (2024-2025)

This years are 1.7% higher

is this normal ?

Not sure what error you are trying to portray. Public sector pensions increased by 1.7% in April.

Dazed_and_C0nfused

[Deleted User] said:

MouldyOldDough said:

I have just received last years tax statements (P60's) for my pensions and believe that HMRC have made a mistake

My online tax shows

Your PAYE Income Tax summary for 6 April 2025 to 5 April 2026

using last years figures (2024-2025)

This years are 1.7% higher

is this normal ?

Not sure what error you are trying to portray. Public sector pensions increased by 1.7% in April.

I think it's the other way round.

The op knows his pension will increase by 1.7% but HMRC's estimate doesn't reflect that. 

Which is, in HMRC's eyes, correct as they use the latest Real Time Information (payroll) data when calculating the estimates for the new tax year.  Chances are the 2025-26 amounts were based on the RTI data to month 9 or 10 of 2024-25.  And no inflation element is added.

[Deleted User]

Dazed_and_C0nfused said:

[Deleted User] said:

MouldyOldDough said:

I have just received last years tax statements (P60's) for my pensions and believe that HMRC have made a mistake

My online tax shows

Your PAYE Income Tax summary for 6 April 2025 to 5 April 2026

using last years figures (2024-2025)

This years are 1.7% higher

is this normal ?

Not sure what error you are trying to portray. Public sector pensions increased by 1.7% in April.

I think it's the other way round.

The op knows his pension will increase by 1.7% but HMRC's estimate doesn't reflect that. 

Which is, in HMRC's eyes, correct as they use the latest Real Time Information (payroll) data when calculating the estimates for the new tax year.  Chances are the 2025-26 amounts were based on the RTI data to month 9 or 10 of 2024-25.  And no inflation element is added.

Yep - that’s makes sense!

molerat

The subject has come up on here many times.  HMRC have a set method for estimating your income for the year, it is only an estimate as they are not privy to the actual amounts you will receive.  If you wish you can now update those incomes to an accurate estimate.

Albermarle

MouldyOldDough said:

I have just received last years tax statements (P60's) for my pensions and believe that HMRC have made a mistake

My online tax shows

Your PAYE Income Tax summary for 6 April 2025 to 5 April 2026

using last years figures (2024-2025)

This years are 1.7% higher

is this normal ?

The issue is that HMRC are not psychic, and have to estimate your income.

Grumpy_chap

Dazed_and_C0nfused said:

The op knows his pension will increase by 1.7% but HMRC's estimate doesn't reflect that. 

Which is, in HMRC's eyes, correct as they use the latest Real Time Information (payroll) data when calculating the estimates for the new tax year.  Chances are the 2025-26 amounts were based on the RTI data to month 9 or 10 of 2024-25.  And no inflation element is added.

In many cases, that will still result in the correct tax code being applied.
It is only if the 1.7% increase results in the income crossing a tax band that the outcome would result in incorrect tax being collected.

MouldyOldDough

Albermarle said:

MouldyOldDough said:

I have just received last years tax statements (P60's) for my pensions and believe that HMRC have made a mistake

My online tax shows

Your PAYE Income Tax summary for 6 April 2025 to 5 April 2026

using last years figures (2024-2025)

This years are 1.7% higher

is this normal ?

The issue is that HMRC are not psychic, and have to estimate your income.

I assumed that employers informed HMRC of my income 

Dazed_and_C0nfused

MouldyOldDough said:

Albermarle said:

MouldyOldDough said:

I have just received last years tax statements (P60's) for my pensions and believe that HMRC have made a mistake

My online tax shows

Your PAYE Income Tax summary for 6 April 2025 to 5 April 2026

using last years figures (2024-2025)

This years are 1.7% higher

is this normal ?

The issue is that HMRC are not psychic, and have to estimate your income.

I assumed that employers informed HMRC of my income 

They do, and that is what it will be based on.

But they only tell HMRC what has actually been paid, not what they are going to pay in the future.

The initial tax codes for 2025-26 would be calculated in January and February 2025, tow or three months before that tax year starts.  So it's an educated guess at that stage.

You can always update the figures via your Personal Tax Account if you have more accurate ones.