Pensioner - All about my pension
Tax and your pension
What about tax and my pension?
Your lump sum is completely tax-free.
However, you will almost certainly have to pay tax on your monthly pension.
Your pension will be taxed on the emergency single persons tax code until your local tax office tells us the correct rate to use.
Already being paid a Guaranteed Minimum Pension (GMP)
If you have been receiving a Guaranteed Minimum Pension only and are now claiming the rest of your pension benefits there will be no change to your tax code.
Your tax office
Your tax office might need to write to you about your income before deciding the correct rate. We can't refund tax, or make any other adjustments, until your tax office confirms the rate we should use. So if you are expecting a refund it may take a little while.
If you want to know more about the tax you will pay, get in touch with your tax office.
The address of the tax office that will deal with your tax affairs is:
Pay As You Earn
HM Revenue and Customs
Phone: 0300 200 3300 Textphone for hearing impaired people:0845 302 1408 If you're calling from abroad phone:+44 135 535 9022
Your tax reference is:072/W6
Please quote this reference whenever you contact the tax office. You can get leaflets about tax from your local tax office or from the HM Revenue & Customs website (www.hmrc.gov.uk).
If you think you underpaid tax because HMRC (the tax office) made a mistake, you can ask them to consider writing off some or all of the tax you underpaid.
They will only consider writing off underpaid tax if:
- You checked your tax code when it was issued and had no reason to think it was wrong, and
- HMRC must have delayed using available information (HMRC defines a delay as being more than 12 months from the end of the tax year when it should have discovered the error.) As you will be aware WYPF issue a P60 each tax year to all of our pensioners who are receipt of taxable income. We post this to you around May of each year. We also send direct to HMRC details of the amount of taxable pension you have been paid, the amount of tax deducted and the tax code operated against your pension at each tax year end. We will have issued this information from the tax year when you first commenced receiving your pension.
If you think tax was underpaid because of a mistake by HMRC, then you can ask HMRC to consider writing off some or all of the tax. It must have been reasonable for you to have thought that your tax code was correct - this means that you should have checked your tax code when it was issued. In addition, HMRC must have delayed in using information available to it. HMRC considers a delay of 12 months from the end of the tax year in which it should have been aware of the error to be reasonable.
Look at the following websites for further help:
HM Revenue & Customs > delays in using information