HMRC State Pension Tax Error: Check Your Figures and Know When to Contact HMRC

HM Revenue & Customs (HMRC) has acknowledged a historical error in how some State Pension income was used in UK tax calculations. If you receive the State Pension, the useful question is not simply whether you were affected by the error, but whether your own tax record shows an incorrect figure, whether it changed the tax you paid, and what action is appropriate.

As of October 29, 2026: HMRC has announced a fix for future PAYE and Simple Assessment reconciliations and a plan to correct recent historical cases proactively. You can still check your own figures and raise a concern if they do not match your entitlement records. A discrepancy does not automatically mean you are owed a refund.

What was the HMRC State Pension tax error?

In a July 1, 2026 letter to the UK Parliament's Treasury Committee, HMRC said some systems used 52 weeks of State Pension at the new, higher annual rate. For most people covered by the affected calculation, the correct taxable figure is one week at the previous tax year's weekly rate plus 51 weeks at the new rate.

The mistake began with a PAYE systems change in 2010 and affected certain year-end PAYE reconciliations, pre-filled Self Assessment State Pension figures, and Simple Assessment calculations. Because the problem was generally an overstatement of taxable State Pension income, it could lead to excess tax being calculated or collected. HMRC also explained that many small discrepancies did not result in a change to the tax actually collected because of its administrative tolerances.

In a September 3, 2026 update, HMRC said it had implemented a system change on August 25 for future PAYE and Simple Assessment reconciliations. It also said it expected to correct 2025–26 Self Assessment information and to identify affected customers for years from 2020–21 without requiring them to make a claim. Its estimate was approximately 3.2 million customers receiving repayments totaling around £19.3 million, with most corrections and repayments expected during the 2026–27 financial year. These were HMRC's estimates and timetable, not confirmation that every individual case has already been resolved.

Why the State Pension can be taxable even though no tax is deducted from it

Your State Pension is taxable income, but the Department for Work and Pensions (DWP) does not deduct Income Tax from the payment before you receive it. HMRC may collect tax through a workplace or private pension tax code, or through another applicable tax process.

For the 2026–27 UK tax year, April 6, 2026 through April 5, 2027, the standard Personal Allowance is £12,570. If your total taxable income is below your applicable allowances, you will not generally owe Income Tax. The amount of tax depends on your other income, reliefs, allowances, and where in the UK you live: Scotland has different rates for pension income. Check the official Income Tax allowances and Scottish Income Tax rates rather than assuming the same rates apply nationwide.

How to check whether your State Pension tax figure is wrong

1. Gather the right documents

• Your DWP State Pension award and annual uprating letters, including the weekly rate before and after April's increase.
• Any HMRC P800 tax calculation, Simple Assessment letter (PA302), tax code notice, or Self Assessment return for the year in question.
• P60s from workplace or personal pensions, payslips if you were employed, and records of other taxable income.
• The tax year, State Pension start date, and any changes in entitlement during that year.

Use DWP letters to check the State Pension you were entitled to receive, not just the deposits shown on your bank statement. State Pension payments are commonly made in arrears, so the payment date and the tax-year entitlement are not necessarily the same thing. HMRC explains this distinction in its State Pension taxation guidance.

2. Work out the annual entitlement for the relevant year

For a straightforward full tax year where the usual April rate change applies and the pension began on or after April 6, 2010, HMRC explains the calculation as:

Taxable State Pension = (1 × previous weekly rate) + (51 × new weekly rate).

For example, suppose a hypothetical pension rose from £200 to £205 per week. The entitlement-based figure would be £200 + (51 × £205) = £10,655. Using 52 weeks at £205 would give £10,660, a £5 overstatement of pension income. That is not a £5 tax refund: at a 20% marginal tax rate, the isolated difference in tax would be £1, assuming nothing else changes. Your real calculation may differ if you began receiving a pension during the year or your circumstances were more complicated.

3. Compare it with what HMRC recorded

Sign in through the official HMRC personal tax account or use the Check your Income Tax service for the current tax year. Review your tax code, estimated income, employment and pension details, and any available tax calculations. For earlier years, consult the relevant P800, Simple Assessment, Self Assessment return, or previous-year Income Tax service.

Check whether the State Pension figure itself is incorrect, and separately whether the tax paid or due differs. Also look for duplicated pension providers, outdated estimates, or a tax code adjusted because you started receiving the State Pension. A lower tax-free amount in a PAYE coding notice is not by itself proof of an error; HMRC often adjusts a private pension or employment tax code to collect tax on the State Pension.

Which route should you use to raise a concern?

HMRC's tax-code correction guidance explains how to update inaccurate income and pension details. Its P800 guidance explains how to challenge figures on a tax calculation. For a Simple Assessment, the official dispute instructions say to contact HMRC within 60 days; if HMRC issues a decision you still disagree with, the letter will explain how to appeal, generally within 30 days of that decision.

If you have filed Self Assessment, HMRC normally allows you to amend a return within 12 months after the filing deadline; beyond that, you generally need to write to HMRC. Check the Self Assessment corrections guidance for the specific year and filing method.

Should you wait for HMRC's automatic correction?

It depends on your circumstances. HMRC has said it will proactively identify and correct cases from 2020–21 onward where it can do so reliably. Repayment may arrive through an adjustment to a PAYE tax code, a credit to a Self Assessment account, or another method rather than a separate bank deposit.

If you see no apparent discrepancy, have no impending filing or payment deadline, and the year falls within HMRC's announced correction exercise, you may prefer to monitor your account and correspondence. If you have clear evidence of a wrong figure, an incorrect bill, an urgent filing deadline, or a potentially affected earlier year, contacting HMRC is reasonable. Do not file an amended return or duplicate refund request solely because you saw a headline about the error.

For a Simple Assessment, do not ignore a payment due date while the calculation is disputed: HMRC states that the bill is still payable unless it agrees to delay payment. Likewise, an ordinary service complaint is not a substitute for an appeal or formal challenge to a tax decision.

How to contact HMRC and explain the problem clearly

For PAYE and Income Tax questions, use HMRC's official Income Tax contact page. It lists the UK telephone number 0300 200 3300, alongside the available online and postal routes. Have your National Insurance number ready for identity checks, but do not include sensitive account details in public social media posts.

When contacting HMRC, state the relevant tax year, the weekly State Pension rates shown on your DWP letters, the annual entitlement amount you calculated, the amount on HMRC's record, and whether you believe you paid too much tax. Ask HMRC to confirm whether an automatic historical correction is pending and whether you need to take further action. Keep copies of your documents and note the date and outcome of the contact.

If the issue is poor service, delay, or how HMRC handled your case, use its formal complaints process. If your concern is the correctness of a tax bill or decision, use the appropriate correction, review, or appeal route first. People who need help using online services can request additional HMRC support, and family members may be able to help through an authorized arrangement.

Protect yourself against refund scams

The publicity around the HMRC State Pension tax error can also attract misleading refund messages. Do not enter your bank details through an unexpected text or email promising a pension tax rebate. Visit GOV.UK yourself and sign in through its official service. HMRC's scam-identification guidance explains the warning signs and how to report suspicious contact.

The bottom line

First check the DWP entitlement figure against HMRC's tax records for the correct UK tax year. The historical problem concerned the annual pension figure used in certain tax calculations, not an automatic tax charge on every State Pension payment. Use online updates for an ongoing PAYE estimate, the formal correction or dispute process for an incorrect calculation, and a supported case-by-case request for older years where you have evidence. HMRC has committed to correcting many affected cases itself, but checking your documents remains the clearest way to understand your own position.