Tax on State Pension

MoJo

Hi, 
Just highlighting this because I was unaware of it.

State Pension is taxed on what you are entitled to receive, not what you actually receive in a tax year.
So, you may have underpaid tax in the tax year you start drawing your pension (as my OH had) because of the payment dates.
I suppose that, equally, some may have overpaid.

molerat

The first (part) year is always a stab in the dark and a lot depends on the payment dates of other income.  My tax code notification was issued after that month's payroll so I owed that one month of tax at the end of year.

LHW99

And on the other hand I was taxed on a full year when first receiving SP, despite actually receiving 2/3 of a year's payments - and had a bit of an argument when it came to the SA next tax year, as the form had the full year's amount inserted and wouldn't allow changes.