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2016 National Retired Members Conference
9 June 2016

This Conference regrets that there is no automatic notification to HMRC to adjust tax codes to account for the receipt of State Pension. Despite low occupational pensions, the receipt of State Pension frequently puts retired members above the level of personal allowance (£11,000 for 2016/17) and therefore liable for payment of tax. It is everyone’s personal responsibility to inform the tax authorities of the change in their circumstances. Frequently, retired members are not aware of this personal responsibility and by the time HMRC are aware of the circumstances a substantial amount of tax may be owing.

Retired members on limited incomes can ill afford to accrue a tax liability, an unnecessary stress for potentially vulnerable people. It is at the discretion of HMRC whether the payback can be made over a period of time or by lump sum. Additionally, the withdrawal of the age related Tax Allowance only further compounds the issue.

Most UNISON members come under the PAYE system and rarely, if ever, have dealings with the tax office during their working life. Indeed many have never needed to fill in a tax return. It is unlikely that unless their increased tax liability is triggered by other means, new State Pensioners may well not think about advising the tax office of the changes.

In order to protect retired members from accruing a tax liability over a period of time, this Conference

a)instructs the National Retired Members’ Committee to ask all UNISON members occupational pension providers to advise their pension scheme members of the State Pension tax liability when they first receive their occupational pension; and

b)to seek the co-operation and agreement of the Department of Work and Pensions to automatically advise HMRC when State Pension is first paid so the tax code can be automatically adjusted to include the increased income, thereby removing the danger of underpaid tax.