State Pension and tax code 2026/27

jem16

Couldn't make my mind up if better in the Cutting Tax board or here but decided here.

New tax codes are arriving for 2026/27. If on the full new state pension it should show 51 weeks of new rate of £241.30pw plus 1 week of old at £230.25pw. Total should therefore be £12,536. Assuming no other deductions/allowances, tax code should therefore be 3L.

However on a state pension group I run, we have 3 members who have been given a tax code of 24L based on a deduction for the state pension of £12,306 which seems to be 51 weeks of the new rate. The other week totally missed off.

All three reach SPA in March with one receiving a first payment on 2nd April so the 51/1 deduction should apply. He's contacted HMRC who say their figures are correct and refuse to change it which will result in underpaid tax.

Anyone else come across their tax code only being based on 51 weeks next tax year? Any suggestions as to how to get HMRC to listen and change it?

MallyGirl

I have also seen people raising this issue on t'internet

Albermarle

He's contacted HMRC who say their figures are correct and refuse to change it which will result in underpaid tax.

However the underpaid tax will only be about £43. You could see it as a mini loan from the Govt.

sheramber

https://forums.moneysavingexpert.com/discussion/6656274/state-pension-and-tax-code-2026-27

HMRC do not work out pension payments.

The figures are supplied by DWP so it is DWP you would need to contact.

jem16

https://forums.moneysavingexpert.com/discussion/comment/81892938#Comment_81892938

The DWP supplies the weekly payment figure to HMRC along with the starting date of the pension. That’s been done correctly. HMRC then utilises that weekly figure and works out the yearly figure using 51/1 weeks as per its legislation. This is an HMRC issue, not a DWP one.

jem16

https://forums.moneysavingexpert.com/discussion/comment/81892922#Comment_81892922

Yes I suppose they could see it that way but of course you’ll then get the why am I being asked to pay more tax cries next year?

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81892938#Comment_81892938

True but the issue here isn't with the figures being reported by DWP, it's what HMRC have done afterwards from a tax code perspective.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/6656274/state-pension-and-tax-code-2026-27

I wouldn't be sure the date someone received their first payment is a factor here. I'm not sure HMRC even know that level of detail about the State Pension.

HMRC's own guidance clearly points to full weeks being an important factor. How many full weeks State Pension were these three people entitled to State Pension for in 2025/26?

https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye76086

badmemory

Well I usually find that they are both wrong. DWP persists in notifying 52 weeks at the new rate & not 51 weeks at the new & one at the old & HMRC persists in accepting the 52 week version. For the last over a decade HMRC has accepted my (correct) version.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81892951#Comment_81892951

You would be able to tell them aren't paying "more", they are just paying some of the tax due later than they would usually pay it.

jem16

https://forums.moneysavingexpert.com/discussion/comment/81892996#Comment_81892996

Yes I know it’s about entitlement rather than payment.

What I was meaning was that if someone’s birthday was say 31st March their entitlement may not arise till up to 6 days later depending on which day their regular pay day is depending on NI Number and could mean the first week of the new tax year is discounted as HMRC seem to discount anything but full weeks.

In the case of the 2nd March SPA date, there is no doubt that this person has 52 weeks full entitlement but only 51 weeks are being coded out.