Pensioners advised to delay completing tax returns

The Low Incomes Tax Reform Group (LITRG) has advised pensioners to wait until the end of May before completing a tax return due to HMRC issuing notices despite introducing a new system which means that pensioners with a state pension exceeding their personal allowance may no longer have to file a return

Up until 6 April 2017 the only way HMRC could collect tax due on state pensions which exceeded the personal allowance was to issue a self assessment tax return as a result of the Department for Work and Pensions (DWP) not deducting tax due under PAYE.

In April, HMRC introduced a system which means that individuals do not have to complete a tax return if there is no other income that needs to be reported to HMRC. Instead a simple assessment will be issued based on the information HMRC receives from the DWP. The tax which is due on the simple assessment will then have to be paid by 31 January.

However, HMRC is still issuing notices to pensioners informing them that they must complete a tax return and then a few weeks later HMRC gets in contact again to backtrack and inform the same pensioners that they are not required to file a tax return due to the new system.

Therefore, the LITRG has advised that pensioners wait until the end of May to see whether HMRC removes their obligation to file a tax return. If an individual believes they qualify for this obligation the LITRG advises that they should wait to see if they receive a note from HMRC before contacting the tax authority asking to be removed.

If an individual is informed to complete a tax return but does not have the notice withdrawn then the return must be filed by 31 January 2018 to avoid any penalties. 

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