TAX ALLOWANCE ABOVE STATE PENSION AND BENEFITS

NOWOLD

My current state pension is above my personal tax allowance because I have transferred 1260 to my spouse and is my only taxable income

The problem is that for benefits puposes the full state pension is being listed as income instead of the NETT with the tax deducted

I am probably one of the first to have this issue which could affect thousands in a couple of years

If this is going to be the norm then the weekly incomes of those getting any sort of means tested benefits is going to reduced each week

Why is the tax not being deducted each week in the calculations?

Will those in my situation need to wait until the end of a tax year to present the tax bill to get the benefits they should have received throughout the year?

So far nobody has an answer.......

Dazed_and_C0nfused

NOWOLD said:

My current state pension is above my personal tax allowance because I have transferred 1260 to my spouse and is my only taxable income

The problem is that for benefits puposes the full state pension is being listed as income instead of the NETT with the tax deducted

I am probably one of the first to have this issue which could affect thousands in a couple of years

If this is going to be the norm then the weekly incomes of those getting any sort of means tested benefits is going to reduced each week

Why is the tax not being deducted each week in the calculations?

Will those in my situation need to wait until the end of a tax year to present the tax bill to get the benefits they should have received throughout the year?

So far nobody has an answer.......

What are the rules for the benefit in question?

I would be surprised if tax was relevant to be honest.

QrizB

NOWOLD said:

Why is the tax not being deducted each week in the calculations?

Pensions aren't paid via PAYE. The government could conceivably change their system to do this, but it would cost hundreds of millions and take years. So they've chosen not to.

NOWOLD said:

Will those in my situation need to wait until the end of a tax year to present the tax bill to get the benefits they should have received throughout the year?

What is the benefit you're receiving, and what are the rules?

NOWOLD said:

So far nobody has an answer.......

So far, nobody knows which benefit you're talking about, so it's not surprising that there's no answers offered.

NOWOLD

It can be any means tested benefit such as housing benefit or pension credit for example

Marcon

NOWOLD said:

My current state pension is above my personal tax allowance because I have transferred 1260 to my spouse and is my only taxable income

The problem is that for benefits puposes the full state pension is being listed as income* instead of the NETT with the tax deducted


Why is the tax not being deducted each week in the calculations**?

I can see what you're driving at, but need a bit of input from you to follow the plot (and stand any chance of answering helpfully):

*Listed by whom, and where? DWP?

**Who is doing the calculations? DWP?

What I'm struggling to grasp is why there isn't (apparently) a mechanism for claimants to provide details of their net income, in much the same way they can give details of 'deductibles' such as pension contributions. Is it possible that the fly in the ointment is the transfer of marriage allowance and you've not reported a change in circumstance (ie you now have income which is subject to tax)?

NOWOLD

Screenshot of my HMRC account sent to council includes my current tax free allowance and how much tax I am liable to pay this financial year but it seems they do not have a mechanism for taking the tax into account

Marcon

NOWOLD said:

Screenshot of my HMRC account sent to council includes my current tax free allowance and how much tax I am liable to pay this financial year but it seems they do not have a mechanism for taking the tax into account

That's their problem and you need to point that out to them, albeit with as much politeness as you can muster amid your sense of frustration. If you are entitled to a benefit you should be receiving it and from what you've said, it appears you are entitled.

Screenshot the relevant information relating to Marriage Allowance (you might also give them this link to help focus the mind: https://professionalparaplanner.co.uk/technicalzone/beware-impact-on-marriage-allowance-of-state-pension-increase/), and screenshot the allowable 'deductions' from income in respect of the relevant means-tested benefit. I've done a quick bit of googling but could only find deductions from earnings, and of course you are talking about a pension, so you'd need to be sure the same overall treatment/principles apply.

It is always open to you to make a formal complaint if you think the council has got something wrong https://www.gov.uk/complain-about-your-council but before doing that, have you considered contacting your local councillor - or better yet calling in to their local surgery if they hold one convenient to you - and raising the point with them? Bear in mind it's new territory for everyone, and benefits might not be their Mastermind topic, so give as much help as you can.

NOWOLD

I think this issue my be across all councils and the DWP as tax on state pensions cannot be deducted at source

Marcon

NOWOLD said:

I think this issue my be across all councils and the DWP as tax on state pensions cannot be deducted at source

I'd just focus on sorting it out for yourself!

JGB1955

It shouldn't be rocket science -
State Pension is £**,***.  (A)
Personal allowance is £12,570. (B)
Net pension received is  A - B

Sarahspangles

@NOWOLD Are you expecting to receive benefits or additional benefits because you have elected to transfer some of your personal allowance to your wife?

Or is your query about how your tax will be paid as it can’t be deducted from the State Pension. Thousands of pensioners in this situation pay tax through Simple Assessment.