HMRC to Refund £19.3 Million to 3.2 Million Pensioners

HM Revenue and Customs will refund approximately £19.3 million to 3.2 million state pensioners who were overcharged for income tax due to a long-term calculation error. The mistake occurred when the agency applied an elevated pension rate for all 52 weeks of a tax year, failing to account for one week at the previous year's lower rate during pension increases. This error was based on figures provided by the Department for Work and Pensions.

Automatic refunds will be backdated to the 2020/21 tax year, with an average return of roughly £6 per person. These payments will be distributed through tax code adjustments, Self-Assessment credits, or cheques.

HMRC has declined to issue automatic refunds for the period between 2010 and 2020, citing a lack of sufficient data to correct those years automatically. Pensioners who believe they were affected prior to the 2020/21 tax year must request individual reviews and provide their own supporting evidence for a case-by-case assessment.