Dwp

poluk

Hi, I have a private pension and also started getting State Pension a few months ago. DWP gave HMRC the wrong info regarding my pension amount. As a result I apparently owe HMRC money so they have put me on a K19 tax code for 25/26 tax year. Is it worth contacting DWP to complain.. assuming I can get hold of anyone...
 Also, is it best to just pay it now in full so tax code can be adjusted?
Many thanks

Dazed_and_C0nfused

poluk said:

Hi, I have a private pension and also started getting State Pension a few months ago. DWP gave HMRC the wrong info regarding my pension amount. As a result I apparently owe HMRC money so they have put me on a K19 tax code for 25/26 tax year. Is it worth contacting DWP to complain.. assuming I can get hold of anyone...
 Also, is it best to just pay it now in full so tax code can be adjusted?
Many thanks

People often misunderstand how tax works in the first year State Pension starts.

If you provide the details then it is easy to check if it's correct or not.

In your shoes I wouldn't waste my time with DWP until you fully understand what has happened and if there is actually anything wrong.

And I equally wouldn't pay it until you know if something is definitely wrong.

poluk

Hi, thanks for your reply. I think you're right about DWP. I've just looked at my online account and it says I owe £175 and to collect it they have reduced my PA by £877 and my annual tax free amount is now -£202.
I rang HMRC earlier and although the person I spoke to was very pleasant, I'm still none the wiser! 

Dazed_and_C0nfused

poluk said:

Hi, thanks for your reply. I think you're right about DWP. I've just looked at my online account and it says I owe £175 and to collect it they have reduced my PA by £877 and my annual tax free amount is now -£202.
I rang HMRC earlier and although the person I spoke to was very pleasant, I'm still none the wiser! 

As a basic rate taxpayer a reduction in tax code allowances of £877 will mean you pay an extra £175.40 in tax (877 x 20%).

What is it you think is wrong? 

Have you calculated the tax you are due to pay for 2024-25 and compared that to the tax you did pay in 2024-25?

molerat

It is quite likely that your tax in the first year of SP will be incorrect, are you certain that "wrong information" was given to HMRC ?  I owed tax in the first year down to the date of payment of the income stream the revised tax code was set against - HMRC calculation was based on recovering the tax over 4 months but the code change missed the first payment date.  And why would you want to give HMRC £175 now when you can pay it off in easy monthly instalments ?

poluk

Hi both,

It was HMRC who mentioned about the DWP error.

I am going to have to get my calculator out again!!

Thanks for your responses.

Regards

Dazed_and_C0nfused

poluk said:

Hi both,

It was HMRC who mentioned about the DWP error.

I am going to have to get my calculator out again!!

Thanks for your responses.

Regards

Don't forget it's not the State Pension you received which is taxed, it's the amount you were entitled to.

So say you were entitled to the standard new State Pension of £221.20 then you multiply that by the number of weeks in the 2024-25 tax year from when it started to 5 April 2025.

You ignore what was paid into your bank account by DWP.