If you complete a Self-Assessment tax return, or expect to do so in the coming months, it is worth taking a few minutes to check that the information HMRC holds about your State Pension is correct.
HMRC has recently identified an issue affecting some taxpayers where the amount of State Pension included in tax calculations may not have been accurate. Although the problem does not affect everyone, it serves as a timely reminder that the figures pre-populated by HMRC should never be accepted without review.
The State Pension is taxable income, even though tax is not usually deducted before it is paid. This means it must be included correctly on your Self-Assessment tax return where one is required. An incorrect figure could result in too much or too little tax being calculated.
The issue is particularly relevant for people who started receiving their State Pension during the tax year, experienced a change in their entitlement, or rely on information automatically provided by HMRC when preparing their return.
It is always sensible to compare the amount shown on your tax return with your own records. This may include annual State Pension statements, bank statements showing pension payments, or correspondence received from the Department for Work and Pensions.
Checking the figures before submitting your return is much easier than correcting mistakes afterwards. If an error is discovered after filing, it may be necessary to amend the return and, depending on the circumstances, pay additional tax or claim a repayment.
The incident also highlights a wider point. While HMRC increasingly uses digital systems to populate tax returns with information it already holds, those systems are fallible. The legal responsibility for ensuring that a tax return is complete and accurate always rests with the taxpayer.
Preparing your tax return early provides time to identify missing information, resolve discrepancies and avoid the pressure of the January filing deadline. It can also provide earlier certainty over any tax payable, making it easier to budget for future payments.
If you are unsure whether your State Pension has been reported correctly or would like your 2025-26 tax return reviewed before submission, we will be pleased to help. A simple review today could prevent unnecessary correspondence with HMRC and ensure you pay no more tax than you should.
