Home Finance Millions urged to put money aside NOW as state pension tax raid...

Millions urged to put money aside NOW as state pension tax raid starts on Monday

Any tax owed must be paid within three months of the simple assessment, or by January 31, 2026.

Older pensioners who retired before April 6, 2016 on the basic state pension may also find themselves caught in HMRC’s stealth tax trap.

In some cases, they will have to pay income tax on their state pension.

The basic state pension will also increase by 8.5 percent from next week, but it will pay a lower amount of just £8,814 a year.

That is some way below the personal allowance. However, many older retirees will also receive additional state pension, such as the state second pension (S2P) or state earnings-related pension scheme (Serps).

In some cases, this will lift their total state pension above £12,570, where it will be taxed.

There is also no certainty that HMRC will get it sums right, given the complexity of the case. So people have to sit down and work out what they really owe, adding to the difficulties.

It’s all going to be incredibly complicated, while advice and support from HMRC will be in short supply, as its helplines are in disarray.

If that wasn’t bad enough, many of those hardest-hit will be older pensioners, who may struggle with the complexities involved.

A large number will be older women who may never have done a tax return in their lives.

Simple assessment is anything but simple. Frankly, it’s going to be horrendous.


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