Tax Demand £180 received this week on my Oension

[Mharte88]

I am on Benefit for Rent and lower Council Tax payments, at 79 yrs old no other income ;I paid full Stamp for 12 years when I had my children( on Monday of last week I got a letter from Pensions office saying I owe £180 in tax since April 2024 when the new Pension was given out. How am I meant to find £180 before next April? I did not receive the last £150 Cost of Living payment in April either; I haven’t been reading anything about this. Now I don’t have to it’s come right into my home?Worrird silly,

How much is your pension annually? Is it your only source of income?

I also have just had my first tax demand since I retired 6 years ago. The state pension is taxable and perhaps your other benefits are as well? Added together, are they over the single person's tax allowance of £12,570? Please contact HMRC (there is a phone number on the letter) and tell them your fears. Good luck.

To Pandora Sox (sorry can’t see a reply symbol) Pension £277.33 a week ; no other income at all as now 79.!thank you for taking the time to reply, I am very grateful. Molly c

So your pension is £14,421.16 p.a , which is above the income tax threshold of £12,570 by £1,851.16 p.a so you will need to pay tax on that at 20% (£373.00 p.a I think).

HMRC don't tax State Pensions at source, which is why you have a tax demand. You will get this each year now I expect.

I guess the two or three recent increases in State Pension have pushed you over the tax threshold for the first time.

Eta: hopefully all my maths is correct! If you are having trouble paying the tax, as pp says contact HMRC. They will help you.

Is that £277 just your pension?
Or is that including the amount you get in for your rent?

If that is just pension, not including benefits, then yes you are over the threshold to pay tax.
I'm not sure if your other benefits are taxable though, I will have to have a look.

Housing benefit isn't taxable. Nor is council tax reduction.

Thankyou Pandora, that's good to know.

So as the basic State Pension for someone who retired before 2016 is £169.50 per week, your pension must be being topped up from somewhere.

If I were you, I would phone HMRC state pension service on the number in the photo below. I have found them very helpful .
Have your tax demand with you, you will need your nation insurance number- they will ask you for that plus the usual dob and address.

Be prepared for a long wait to get through- there will be a long time on hold, so get comfy with a cup of tea and a book and the phone on speaker!

When you finally get through to a person they are helpful and will explain things to you. Have a pencil and paper to note down what they say.

From the amounts it looks like you are getting more than the basic amount- if you can find any other letters or statements that will probably help.

My Mil was in a similar situation- she got the full basic state pension, then a small pension from working at the school plus a % of her late husband's work pension. This took her income just over the tax threshold so she had a small amount of tax to pay.

Forgot the photo!