HMRC apologises after Hmrc Pensioner Income Tax Error affects 1.7 million
HMRC apologised after a hmrc pensioner income tax error affected state pensioners who complete self-assessment returns, with an estimated 1.7 million people potentially impacted. The calculation issue came after HMRC’s online systems had been automatically inserting state pension income based on 52 weeks at the new rate.
The department said the tax difference was around £5 in most cases, meaning many pensioners who submitted returns without spotting the mistake could have paid a little more tax than they needed to. HMRC also said state pensioners should report 51 weeks at the new pension rate and one week at the old rate.
HMRC and DWP data
The error arose because data supplied by the DWP was calculated differently from HMRC’s legal requirement for self-reporting tax. HMRC guidance sets out the 51-week and one-week split, while the online system had been filling in 52 weeks at the new rate.
That mismatch mattered most for people with non-PAYE income who use self-assessment, including freelancers, landlords and others with self-employment income. HMRC urges those taxpayers to submit a return before the end of each January and is encouraging people to file early.
Steve Webb and Grant Thornton
Steve Webb, a partner at pension consultants LCP, said: “The way the state pension is taxed is a regular source of confusion, but it is worrying that HMRC seem to have been getting it wrong themselves.” Grant Thornton spotted the error before HMRC issued its apology on June 15, 2026.
HMRC said anyone who needs to submit a self-assessment tax return for the 2026-27 tax year will be required to do so by January 31, 2027 if filing online, while paper returns are due by October. The previous tax year, 25-26, has now ended, and tens of thousands of returns had already been submitted for that year.
For pensioners who already filed, the practical issue is whether their return included the wrong pension figure and, if so, whether the tax bill moved by only the small amount HMRC described. The immediate task is to check the figures used in the return against HMRC guidance, especially for anyone with other income that keeps them inside self-assessment.
