Mike explained how he was approached by one retiree, questioning whether HMRC was correctly calculating tax on his state pension.
11:06, 12 May 2026Updated 12:49, 12 May 2026
HMRC admits state pension error with 1.7 million claimants at risk
HMRC has admitted a glaring state pension tax error. The Telegraph’ s expert and resident tax columnist, Mike Warburton, has discovered that nearly two million people could be affected.
Mike explained how he was approached by one retiree, questioning whether HMRC was correctly calculating tax on his state pension. The state pension claimant said HMRC guidelines for pensioners to complete their self-assessment were not in accordance with the statutory position.
This is because the state pension is not taxed on the basis of when you are paid, but on your entitlement as it accrues over the tax year. In DWP guidance, the welfare department says: “Add up the amount you were entitled to receive from April 6 2025 to April 5 2026 and put the total in box eight.
READ MORE Jet fuel update for UK tourists planning Spain, France, Italy holidays
“For tax purposes, the correct amount is always the figure of weekly entitlement, not the number of payments you received, so this will be the first week at the old weekly pension rate, plus 51 weeks at the new weekly pension rate.”
After reading it, Mike opted to check the state pension box in my online self-assessment, and discovered it had been pre-populated at 52 times the main rate for 2025-26.
After being approached by the expert, the Labour Party government’s tax arm confirmed that self-assessments for all pensioners had been pre-populated on this basis.
Mike said: “If the guidance is correct in law, as the department confirms, it is an admission that HMRC has pre-populated around 1.7 million self-assessment returns for pensioners at higher amounts than the law requires.”
HMRC said: “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.”