Yes, it is. However, there is no mechanism to deduct tax due at source so those pensioners with occupational pensions have their personal tax allowance reduced by the amount of the State Pension so that the tax due on both sources is all deducted from the occupational pension.
If your State Pension exceeds your personal tax allowance but you do not have any other source of income, then HM Revenue & Customs (HMRC) will collect the tax in a lump sum through another method. Up to and including the 2015/16 tax year it was the self assessment system. From the 2016/17 tax year HMRC will send you a PA302 calculation, known as Simple Assessment. If you think this is you and you don't hear from HMRC, contact them to find out what you should do, or call Tax Help for Older People for advice.
This change is good news because rather than expecting you to complete lengthy forms, HMRC will instead send you a bill called a PA302 explaining how to pay. All you need to do is check that the figures agree with yours and pay by the following 31st January. If you think something is wrong or you can't afford to pay in one lump sum contact HMRC immediately as late payment interest will start after the payment deadline.
Comments are closed.