As the state pension is set to rise again this year, more pensioners could face some shock tax bills and may receive a letter from HMRC, as they may have to pay tax on their pensions for the first time.
The tax office will soon start sending out "simple assessment" tax calculations to Brits who have not paid enough income tax through their pay as you earn (PAYE) code.
The letter shows you the tax due based on information HMRC has received from third parties, including employers, pension providers, banks, building societies, and other government departments, including the Department for Work and Pensions (DWP).
If you still do not agree with the calculation after HMRC has given you a final response to your queries, you can appeal to the First-tier Tribunal within 30 days of HMRC’s response.
HMRC usually sends these letters out annually, usually between June and March of next year, and they explain how you can make a payment and what you need to do if you disagree.
