Blogger
Share this content
0
3
1242

Self Assessment State Pension

The self assessment sheet has a state pension figure provided by DWP of £7,150, being £137.50 X 52. During 2012 DWP corrected a mistake and reduced pension to £130.25 pw but did not claw back overpayment. HMRC say that tax is payable on pension due, not on pension received. Pension received £132.5 * 4 + £137.5 * 36 + £130.25 * 12 = £7,043. Pension due was thus £130.25 * 52 = £6,773, but received £7,043. What amount is taxable?

Replies

Please login or register to join the discussion.

It's clear.

You're taxed on the amount received, regardless of what DWP say.

Thanks (0)

Assessable income from Pensions

I believe the legislation is The Income Tax (Earnings & Pensions) Act 2003 and in Ss 570 & 571   it states (my bold/underscore)  -  "

S 570    Pension: interpretation

In this Chapter pensions includes a pension which is paid voluntarily or is capable of being discontinued.

S 571Taxable pension income

If section 569 applies, the taxable pension income for a tax year is the full amount of the pension accruing in that year irrespective of when any amount is actually paid. 

 

 I hope this is helpful

Thanks (0)

Thank you.
I will need to get a statement from DWP as the monthly receipts are out of phase with the accrual basis by a few weeks.

Thanks (0)