An administrative error by HM Revenue & Customs (HMRC) is affecting at least 1.7 million pensioners, potentially overcharging them on tax. The issue concerns those receiving the state pension who are required to file a self-assessment tax return.
The error stems from HMRC's system pre-populating 52 weeks at the new pension rate instead of one week at the old rate and 51 at the new rate. This approach contradicts HMRC's own published guidance, which reflects how entitlement accrues over the tax year.
Although the overcharge is small—around £5 per person—the scale of the error means millions are affected. HMRC is urging pensioners to check their tax returns carefully before the self-assessment deadline on 31 January 2027.
HMRC apologised, stating: “We apologise to those affected by this calculation error, although the impact is small, with the difference in tax owed being around £5 in most cases. Anyone who believes the amount of state pension shown on their tax return is incorrect can amend the figure before submitting their return, and anyone who believes they have overpaid tax can request a repayment.”
Steve Webb, partner at pension consultants LCP, commented: “The way the state pension is taxed is a regular source of confusion, but it is worrying that HMRC seems to have been getting it wrong themselves. For pensioners who have to file an annual tax return, they need to check what figure has been included for state pension.”
Pensioners can amend the state pension figure on their return if it is wrong, and those who have already filed can request a repayment. Depending on the cause of overpayment, refund claims may involve specific forms such as P55, P53Z or P50Z, or waiting for HMRC’s year-end calculation.
