Q&A: tax liability on state pensions

7 Sep 2021

In our weekly Q&A series, Suzanne Rowland, tax adviser at Croner Taxwise, considers whether tax is payable on a state pension and compliance with self assessment

My client’s partner is not in the self-assessment system as their only source of income is state and private pensions taxed via PAYE.

However, the taxpayer is concerned they will owe tax for the 5 April 2021 tax year as their coding notices for the private pensions have been worked out on the basis they will be in receipt of 52 weeks of state pension, but they actually received 53 weeks of state pension.

Do I need to bring them into self-assessment for what appears to be a small tax under payment due to an extra week of state pension?