On a kitchen table in Leeds a pensioner checking an online self-assessment spotted a tax bill a few pounds higher than expected, a small discrepancy that exposed a wider software fault. HM Revenue and Customs has apologised after its system pre-filled state pension income using a full 52 weeks at the new 2025-26 rate, rather than applying HMRC's split-week rule, overstating taxable pension by £9.05 a week in the example cited. HMRC says about 1.7 million people who file self-assessment returns saw the wrong pre-filled figure and that, for most individuals, the extra tax charged is around £5. The department expects to fix the calculation this summer and said affected pensioners must contact HMRC to amend figures and reclaim any overpaid tax.

At the kitchen table in Leeds the difference seemed trivial: a tax charge roughly the cost of a couple of bus fares. That small line item has since prompted HMRC to trace a software error back to the way it imported Department for Work and Pensions data into the online self-assessment service.

How the pre-fill went wrong

HMRC's pre-filled figure used DWP data on a flat 52-week basis rather than applying HMRC's reporting rule, which requires one week at the old 2025 rate and 51 weeks at the new rate. For the 2025-26 tax year the full new state pension rose from £221.20 to £230.25, a gap of £9.05 a week when the split-week method isn't applied. That weekly overstatement nudged some self-assessment bills above the correct amount and produced an average overpayment of about £5, HMRC says.

The miscalculation was identified by the accountancy firm Grant Thornton, which raised the issue with HMRC. HMRC said it was alerted to the fault in 2025 and informed the DWP later that year. An HMRC spokesman apologised, saying, "We apologise to those affected by this calculation error and are working to fix the issue, although the impact is small with the difference in tax owed being around £5 in most cases."

HMRC says the mistake directly affects those who file self-assessment returns, putting the number of people who saw the wrong pre-filled figure at about 1.7 million. The department added that the impact is small for most individuals. It also warned that there's currently no automatic refund process; pensioners who believe they have paid too much tax must contact HMRC to have their figures amended and reclaim overpayments.

Mastheads

Reporting has suggested the same basis could have reached pensioners taxed through PAYE as well, although HMRC hasn't confirmed a final total. One newspaper calculated that up to 8.7 million income-tax-paying pensioners might have been affected and that as much as £43.5 million could have been collected in error last year.

HMRC hasn't verified those wider estimates.

The department said it's identifying who was affected so corrections can be made. Affected pensioners continue to pay tax as usual until their figures are amended.

The error has drawn political criticism.

For HMRC the problem is operational as much as reputational: a routine data import generated a calculation outcome that, while small for many individuals, scales into a politically sensitive sum when multiplied across millions of pensioners. Grant Thornton's flagging of the issue points to a gap in automated checks between DWP data feeds and HMRC's tax rules.

HMRC has said it's working to correct the calculation error and expects to resolve the issue this summer. The immediate task is identifying all affected records and implementing amended figures so pensioners can claim refunds where appropriate.

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HMRC expects to fix the calculation this summer. Pensioners who believe they were overcharged should contact the department to have their figures corrected and reclaim any tax paid in error.

This article was created with AI assistance.