Key points
- HMRC is removing taxpayers receiving state pensions from self assessment.
- Simple assessment is not necessarily a straightforward alternative to self assessment.
- State pension is likely to be higher than the single personal allowance by 2026-27.
- Should the pension be paid net to reduce the likelihood of tax underpayments?
HMRC has written to a number of taxpayers who receive state pensions removing them from self assessment despite them having a tax liability and there being no clear alternative mechanism to collect the tax. As more and more individuals with just a state pension are drawn into the tax net we look at what other options may be available for HMRC to collect the tax outside the self-assessment system. We put forward these options ahead of the Autumn Statement next week which in all likelihood will leave things just as they currently stand in this...