Government Letters

Yes, but it didn't go down too well, so to scrape some of their popularity off the floor it's ba-aack this year (sort of)

Rachel Thieves...

It was but there has been a U turn. It's now effectively means tested.

If you pension is PAYE and you have no other investment income then the £200 clawback will be automatic by a tax code adjustment. If self employed and/or have investment income taking you above £35K you can opt out of receiving it - but no longer this year!

Yes an then re-instated..

.. well what they did was efficient, just needed one letter, and some tweaks to the tax system, and now most of those who deserve the payment get it, and the more well off pay a little more tax. Would you rather they had spent more money to send two letters? Or worse, make it means tested, so you have to fill in an expensive form, some one has to process the forms, and then many who deserve it wouldn't apply...

Dave

They have all the information, all they needed to do was send one letter to the recipients, no letter to the others and no additional tax adjustments for anybody.

It's actually a rather economical and sensible substitute for a means test; the objection to scrapping the universal benefit was always that a new means test would cost more than it saved. And restricting it to people on pension credit was popularly deemed as too mean.

All they need then is a team of clairvoyants at HMRC.

"They" don't have all the information. If your ONLY income is from pensions or as an employee then they have the PAYE information. If you have additional income from investments or self employed requiring a tax form to be filled out then they don't have the information until that form is received. The winter fuel payment is paid in advance of the end of the tax year.

They have changed a simple scheme to something more complex. I suspect that the extra cost in administration may negate the proposed savings.

They don't. In principle I don't know. I, like many others have funds in a draw-down pension. I can decide how much to take each month. The payment is made before the end of the tax year.

Dave

I think many have their pensions in schemes where then can chose how much to take, so yes pensioners, but the pension amount isn't.

I don't think there is much extra cost in the way they have done it. Certainly better than the TV licence scheme where it cost more to process the claims for Pension Credit, and of course to pay it.

Dave

But you already have to do a tax return. All they have to do is add the 200GBP to your code for the following year (or, technically, subtract it); sounds pretty overhead-free to me.

Note that different rules apply in Scotland, where the Scottish Government treats pensioners rather better.

John Armstrong snipped-for-privacy@blueyonder.co.uk> wrote in news:mm3d51F6pm2U1 @mid.individual.net:

That and free prescriptions come out of the extra penny on basic income tax.

Not sure of the overall value balance.

Not all of us have to do a tax return. If your only income is from pension(s) then HMRC know how much you are getting/going to get.

Cheers

Dave R

Sort of. That doesn't include capital gains though.

I haven't filled in a tax return since the 20th century. However, when HMRC calculate your tax code, they can automatically do the adjustment then, since all the data needed is there.

If your income is not a simple regular payment, they're only guessing at your income at that stage (when tax codes are assigned, before the tax years starts), so they can't tell whether you will be over or under the

nib

I'm long retired but had to do SA until I advised HMRC that I only had pension drawdown and state pension so they gave me a tax code. However that has gone up beyond my expectation. HMRC used to send a letter with details of their calculations. I've not had one in the two years the code has gone up and they are taking more tax.

Anyone know how to see all "the data needed" is there because I can't see it.

Mine is all online.