Do you pay UK tax? Check your tax code letter

[Paul Swain]

Hi Everyone!

I got the following message from a new BAPA member.  Looks like it is
important to check your tax code letter to make sure that there are no
errors.

Anyone else had similar problems?


Paul


> My wife and I are UK pensioners, both aged 86, and have been resident
> in Australia for 20 plus years,  so have been drawing our UK pensions
> for a long time.  We are reconciled to the fact that our UK pensions
> are now worth only about half of what they were when we first claimed
> them, but felt we should warn you of a further injustice which may
> affect many "frozen" UK pensioners.
>
> I recently received by mail a new income tax coding from HMRC for
> 2025-26 showing that my UK income tax personal allowance is reduced by
> the amount of UK State Pension I receive. This of course is standard
> practice, but I was irritated to see that the figure they had entered
> as my UK state pension was almost twice what I actually receive.  This
> is despite my declaring the correct (frozen) amount every year on my
> annual UK tax return, and also adding a note in the "other
> information" box to explain that this pension is frozen for life.
>
> Contacting HMRC from Australia is not easy, as you will know. The
> return address on the back of the envelope containing the new tax code
> includes the stern instruction: "DO NOT REPLY TO THIS ADDRESS".  The
> HMRC website advises UK taxpayers overseas to set up their own
> personal online income tax account, through which they can correct any
> errors in their personal details. However in order to do that, the
> taxpayer has to verify his/her identity with a current UK passport and
> driving licence. As we have been overseas for more than 20 years we do
> not have either. The only other option is to telephone HMRC  during
> their working hours, allowing of course for the time difference. The
> problem with that is that the caller is put on hold for a very long
> time, often in excess of half an hour, with the telephone bill
> steadily mounting.
>
> However, when eventually I was able to speak to somebody at HMRC, my
> code was quickly corrected, and it was obvious from my conversation
> with them that this is not an uncommon error- it has certainly
> happened to me at least three times since I have been living in
> Australia. The reason is of course that the tax office ask the
> pensions office to supply the pension details for all UK taxpayers who
> are also pensioners, and the pensions office gives them the amount of
> pension that I should be getting, rather than the frozen amount that I
> actually receive- and they are the people who are paying it !
>
> My concern is that had I not noticed the error, I would have been
> charged a great deal more UK Income Tax than I should, and this may
> well happen to many other UK frozen pensioners unless they watch their
> tax coding notices carefully.
>
>