HMRC has issued an update on tax changes coming in soon for state pensioners. The group confirmed it will “adjust” a person’s records as their payments change.
State pension payments are set to go up 4.8 percent in April, thanks to the triple lock policy. This metric ensures payments go up in line with whichever is highest of 2.5 percent, the rise in average earnings or the rate of inflation. Guidance on the Government website reminds taxpayers that HMRC will “change your tax code if you need to pay a different amount of tax”.
The advice lists several changes that can trigger this change to your tax code, one of which is “your weekly state pension amount changes”. HMRC was asked to clarify in what situations a state pensioner’s tax code may need to be change, if their payments change.
An HMRC spokesperson said: “We adjust tax codes based on information from DWP to help pensioners pay the right tax. Anyone who thinks their tax code is incorrect can update their details on our app or via their online tax account, or contact our helpline if unable to go online.”
The group explained that anyone claiming the state pension gets the triple lock increase “automatically” each April. The increase is applied from the start of the new tax year, on April 6.
HMRC officials said that a claimant’s tax code may be update when DWP informs HMRC of the new, uprates state pension amount. The group said: “This process can trigger new tax code calculations for both the current tax year and the following year.”
Most pensioners who pay tax are in Pay As You Earn, in which case HMRC works out how much state pension you get over the year by calculating one week at your previous rate rate of state pension and 51 weeks at the new rate, and adjusting your tax code to reflect this.
HMRC said this ensures “most pensioners pay the right amount of tax in real time”. You can view your tax code and update your employment or other tax details through the HMRC app or through your online tax account.
If you believe your tax code is wrong and you can’t get in touch online, you can also call up HMRC. The line to cal if you have an income tax query is 0300 200 3300. The phone line is open Monday to Friday from 8am to 8pm and on Saturdays from 8am to 4pm.
For other guidance with your state pension, you can also call the Government’s Pension Service on 0800 731 0469. This is available Monday to Friday from 8am to 6pm.