Taxable state pension query

mjs112

My mum is 80 and living only on her state pension which is a little higher since my dad passed away last year and is now around £1200 but she doesn’t have any other income.

We’ve just had a tax bill for £600 . She wasn’t made aware she needed to pay tax on her state pension so this is quite a shock.

I am going to call them tomorrow and see about paying off a small amount every month but she can’t afford much.

Is this correct??

daveyjp

You pay tax on total income, regardless of where it is from.

£1,200 every 4 weeks is income of £15,600 a year. Personal allownce is £12,570.

£15,600 minus £12,570 £3,030

20% of £3,030 is £606.

molerat

https://www.gov.uk/difficulties-paying-hmrc/overview

Silvertabby

HMRC may accept payments by instalments, but this isn't a one-off, I'm afraid. Your mum will need to start putting away about £55 per month in preparation for next year's tax bill, in addition to paying for this year's.

Have you checked to see if she's getting everything she is entitled to? It may be that her income is too high for her to be eligible for any means tested benefits, but you never know.

LHW99

Does she have any healh issues that might qualify her for attendance allowance? There are two levels, and it's not means tested.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81890545#Comment_81890545

Or taxable 😉

mjs112

Thank you for this. Just makes me so angry as she was never informed about needing to put money away or do a self assessment.
She’s finding it very confusing and upsetting.
She applied for attendance allowance previously but was denied so may try again as her mobility has deteriorated.

DRS1

https://forums.moneysavingexpert.com/discussion/comment/81890677#Comment_81890677

She won't need to do self assessment will she?

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81890677#Comment_81890677

Why do you/she think Self Assessment is required?

Marcon

Just makes me so angry as she was never informed about needing to put money away or do a self assessment.

There has been massive media coverage of this issue for many months, because so many more pensioners are being dragged into paying tax because their pension will exceed the 'frozen' personal allowance.

Based on what you've said, she doesn't need to do self assessment: https://www.gov.uk/check-simple-assessment

SnowMan

As silvertabby says it is worth checking for eligibility for welfare benefits. You can use a benefits calculator to check if your mum qualifies.

https://benefits-calculator.turn2us.org.uk/

Even if your mum owns her own property and doesn't qualify for attendance allowance, with that level of income it is very possible for example that with limited savings (less than £16,000) she may qualify for some help with her council tax through council tax support although it will depend on her council tax band amongst other things. If she does qualify for council tax support it can be backdated for 3 months.

In relation to attendance allowance that's not based on mobility needs but care needs. Of course if her mobility has worsened then that indirectly is likely to have increased her care needs.