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state pension

when taxed

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apologies for a basic question, having a brain malfunction today

state pension paid every 4 weeks, is it taxable on what has been received in the year or entitlement for the year?

e.g. clients weekly entitlement is £106 but final few weeks are paid post 5th April due to timing of the payments, what should be on the sa return?

Replies (19)

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By lesley.barnes
30th Jun 2022 16:43

Its the entitlement - 13 payments.

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By zebaa
30th Jun 2022 16:45

ITEPA 2003 s 578 ‘the taxable pension income for a tax year is the full amount of the pension, benefit or allowance accruing in that year irrespective of when any amount is actually paid'. Note 'accruing'.

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Replying to zebaa:
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By Tax Dragon
02nd Jul 2022 19:32

+1 (and by definition, this can be the only indisputably correct answer, because it's what the law says)

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Replying to Tax Dragon:
RLI
By lionofludesch
02nd Jul 2022 19:59

Tax Dragon wrote:

+1 (and by definition, this can be the only indisputably correct answer, because it's what the law says)

True - but there appear to be dozens of interpretations of what that means.

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Replying to lionofludesch:
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By Tax Dragon
02nd Jul 2022 20:17

But one might expect that, over the lifetime of the pensioner, the amount declared would be within a few pounds of the amount received. Any interpretation that resulted in a difference exceeding say £20 in say 21 years is unlikely to be a truly correct one.

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Replying to Tax Dragon:
RLI
By lionofludesch
02nd Jul 2022 20:43

Sure. But if it's wrong by £1, it's wrong.

Surely the purpose of the forum is to debate the nuances without needing to consider the practicalities.

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Replying to lionofludesch:
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By Tax Dragon
02nd Jul 2022 22:36

I honestly don't know what 'nuances not practicalities' means (too nuanced for me) but you will no doubt be able to work out for yourself that your 52x formula will not get to within a pound of the amount received. I'm not sure whether you meant a pound a year or a pound in total, but either way your formula fails. Indeed, across the 21 years for which my sample pensioner received the payments, it'll be out by somewhere between 3 and 4 weeks' worth of pension.

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Replying to Tax Dragon:
RLI
By lionofludesch
03rd Jul 2022 05:57

We went through this a couple of weeks ago. I suggest you re-read the thread.

Meanwhile, I've a bus to catch. I'm off to Ebbsfleet for the day.

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Replying to lionofludesch:
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By Tax Dragon
03rd Jul 2022 08:56

Yes your formula didn't work in the last thread either. It won't work in the next one. It will never work. Not on your definition of work, which you have now confirmed is "accurate to within a pound".

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Replying to Tax Dragon:
RLI
By lionofludesch
03rd Jul 2022 12:47

Tax Dragon wrote:

Yes your formula didn't work in the last thread either. It won't work in the next one. It will never work. Not on your definition of work, which you have now confirmed is "accurate to within a pound".

And here's me thinking it was spot on.

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By Paul Crowley
30th Jun 2022 17:27

Entitlement
It will be on both a coding notice (if any) and on the agent potal
Quite often those figures do not agree
It will be on the notice of increase as a weekly figure, received Feb/Mar before the year

Or as already said
13 times a normal 4 week payment. Choose a summer month may onwards
This and the increase notice are the only 2 figures that agree to the penny

Never really considered the 53 week year and in all my time HMRC have never ammended any client state pension shown on a tax return
For PAYE people, 53 week year get an extra week of personal allowance for the few left getting paid weekly, so ignoring that on state pension does not seem unreasonable

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the sea otter
By memyself-eye
30th Jun 2022 18:00

the SA return should be pre populated with the state pension.

I've always used that.

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Replying to memyself-eye:
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By Geoff56
01st Jul 2022 08:55

You are right - it should be. However, I do have a small number of cases each year where, for whatever reason, it is not.

Also, I have had the occasional instance, usually in the year that a state pension commenced, where the amount pre-entered has been just plain wrong.

Generally though, it works fine.

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Replying to Geoff56:
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By Laurence52
01st Jul 2022 09:04

Tax return not pre-populated for those taxpayers who are not on the HMRC PAYE system as no other pension or employment.

Those who started receiving state pension in year may well have the wrong figure shown as the tax code notice issued has been on a M1 basis so showing state pension as if received for whole year.

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Replying to memyself-eye:
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By Wanderer
01st Jul 2022 09:55

memyself-eye wrote:

the SA return should be pre populated with the state pension.

I've always used that.

In my experience the API NEVER pre populates software with the SRP.
Unless you are referring to completing a return online in which case it may well.
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By Jane Wanless
01st Jul 2022 09:58

Take care in the first year of state pension. A full year's pension can be included in the PAYE code and used on a W1/M1 basis. Although that's OK for PAYE, the full year's figure sometimes appears incorrectly on the SA system.

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RLI
By lionofludesch
01st Jul 2022 19:13

Noooooooooooooooooooo!

Not another thread so soon!

It's 52 × the weekly amount. Which is not quite what Lesley says in the first response.

There must be over a hundred threads on this.

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Replying to lionofludesch:
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By Geoff56
02nd Jul 2022 08:59

+1

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By fawltybasil2575
03rd Jul 2022 11:42

At the risk of apparent obsequiousness, on matters related to National Insurance Benefits and Contributions (and some other matters too), one bows to the knowledge of David Heaton - see the last post on this thread:-

https://www.accountingweb.co.uk/any-answers/state-pension-1st-year-what-...

Basil.

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