DWP pension advice to HMRC leads to wrong tax code

xylophone

 The K code for the current year 25/26 is applied because your SP is approx £870 a year higher than the Personal Allowance,

This amount is added to your annual gross private pension  (the effect of which is to collect  the £174 due on the SP plus the 20% due on the whole of your private pension).

With regard to 24/25, clearly if your total income was under £12,570 and tax was deducted from your private pension then you were over taxed.

https://www.gov.uk/tax-overpayments-and-underpayments

If you’ve paid too much or too little tax by the end of the tax year (5 April), HM Revenue and Customs (HMRC) will send you either:

• a tax calculation letter (also known as a P800)
• a Simple Assessment letter

This will tell you how to get a refund or pay tax you owe.

When letters are sent

The letters are sent out between June and March of the following tax year.

It would seem that your tax status for 24/5 has not yet been reviewed but this  should be done before end March 2026?

jem16

HugoFS said:

xylophone said:

Have you registered

https://www.gov.uk/personal-tax-account

Yes

What is shown for the year 24/25? 

See also

https://www.litrg.org.uk/pensions/state-pension/tax-state-pension/how-tax-collected-state-pension

Are you in receipt of a regular occupational pension each month? Yes

What is the tax code for the current year? K87 - which reflects correctly that my state pension is augmented because of SSP contributions

Does this help?

Sounds about right if your state pension this year is £13,370. I would also have expected a K code for 2024/25 rather than the 435L Mth1 code you say was applied but no matter.

Still goes back to my previous post where the correct tax was being taken on a month 1 basis but of course couldn’t take account of previous months where there still would have been unused allowances had it been a cumulative tax code.

Your P800 is still to come.

molerat

I suspect assumptions were made on the basis of that first payment.   Did you ever adjust your expected annual income from all sources in your tax account ?  That is something that needs doing every year with multiple income streams.

HugoFS

Thanks for the ongoing comments, xylophone, jem16, and molerat.  All of that makes perfect sense except that I understood the P800 letter should have been received by 30 Nov, as per https://www.gov.uk/claim-tax-refund/y/a-pension/a-private-pension/the-regular-income-from-your-pension

"If your pension provider does not pay you back automatically, HM Revenue and Customs (HMRC) will send you a tax calculation letter (known as a ‘P800’) by 30 November 2025."

That's why I waited until now to approach HMRC.  However, I note xylophone's comment and jem16's agreement that the P800 may be sent any time between June 25 and March 26, so how can I tell which of these two statements by HMRC is actually correct - if any?

molerat asked whether I ever adjusted expected annual income in my tax account?  No, I never did because I thought the tax would either correct itself by the end of the tax year, or I could get it looked at afterwards.  I was prepared for all sorts of discrepancies in the first part-year of pension income, as so many people experience, but I expected it to sort itself out automatically with assessment after the end of the tax year.  I had a calendar reminder set for 30 November to chase it up if I heard nothing, which is of course what happened.

All the same, I am heartened that everyone agrees with me and not the HMRC agent who simply couldn't compute that something may actually be wrong and that I should not have paid any tax at all.

Dazed_and_C0nfused

HugoFS said:

Thanks for the ongoing comments, xylophone, jem16, and molerat.  All of that makes perfect sense except that I understood the P800 letter should have been received by 30 Nov, as per https://www.gov.uk/claim-tax-refund/y/a-pension/a-private-pension/the-regular-income-from-your-pension

"If your pension provider does not pay you back automatically, HM Revenue and Customs (HMRC) will send you a tax calculation letter (known as a ‘P800’) by 30 November 2025."

That's why I waited until now to approach HMRC.  However, I note xylophone's comment and jem16's agreement that the P800 may be sent any time between June 25 and March 26, so how can I tell which of these two statements by HMRC is actually correct - if any?

All the same, I am heartened that everyone agrees with me and not the HMRC agent who simply couldn't compute that something may actually be wrong and that I should not have paid any tax at all.

To March 2026 is the current timeline.

https://www.gov.uk/tax-overpayments-and-underpayments