When your state pension is larger than your personal allowance, you will have a small amount of tax to pay for the year.
To collect this tax HMRC need to ask you to complete a tax return, and ‘self-assess’ the tax due. This appears to be an unnecessary exercise, as HMRC should already know the level of your state pension. It is also pretty stressful.
Now HMRC has the power to assess small amounts of tax due, using a procedure called ‘simple assessment’.
HMRC have started to issue simple assessments (tax demands) to pensioners who have a small tax liability in respect of their state pension, and who had no other income in 2016/17. If this is your tax position, look out for a letter from HMRC containing a tax computation.
You may have already received a letter in April asking you to complete a tax return for the year to 5 April 2017. You should wait to see if you receive a second letter from HMRC which tells you not to complete the tax return after all.
If you have any doubts about a letter or communication from HMRC please forward it to us. HMRC will not ring you to demand tax, or send you emails; those forms of communication are likely to be from scammers trying to steal your bank details.