Earnings above the personal allowance from something else such as rental income as a landlord, should be declared through self-assessment forms as usual, according to HM Revenue and Customs (HMRC).
A bigger bill should be expected this financial year, as the state pension increase will have pushed up overall income, but the process of paying that tax will remain the same.
Those who earn extra income, perhaps through interest on savings or investments that is not taxed through a PAYE number, may never have filled in a self-assessment before.
HMRC said there was no need to complete a self-assessment. Instead, at the end of the tax year they would be sent a Simple Assessment, which is essentially a bill for the tax owed.
It would arrive next July and should be paid by the following January.
A very small percentage of pensioners are likely to fall into this category, but Clare Merrills, from HMRC, recognised that having an unknown bill hanging over you was a concern.
“They really don’t need to worry,” she said. “If there is any tax due we will contact them directly in maybe the June or July after the end of the tax year explaining exactly what they need to do.”
HMRC also said people could contact advisers, especially if they were going to struggle to pay, as the money could be collected in smaller instalments.
A Treasury spokesperson told the BBC: “Pensioners do not pay any income tax if their sole income is from the full new state pension, and we are standing by our commitment to maintain the Triple Lock by raising the basic state pension to almost £170 a week, after the largest ever cash increase last year.
“As the Resolution Foundation has said, the introduction of the Triple Lock and New State Pension means pensioners are on average £1,000 better off than if the state pension had just risen with earnings.”
Credit: Source link
