Tax Credits and State Pension.

[Odea]

I got my amended certificate of tax credits for 2023 recently. I notice that my tax credits have been reduced by the amount of the State Pension plus the Christmas double payment. Were the tax credits always reduced by the Christmas double payment and does this mean that it is guaranteed to be paid for Christmas 2023?

 

[azerty]

They are taxable income. So they reduced your tax credits from the amount. I don't remember that being done previously but my experience dates from a few years ago. The same happened to us for a covid sickness payment last year as well as unemployment benefits.

 

[ClubMan]

As @azerty says, those pension payments are taxable so it looks like they're collecting the tax due last year by reducing your tax credits for this year. This has nothing to do with any double payment next Christmas.

 

[Odea]

Probably. But they have reduced the tax credits by the "new" pension payment amount that starts in January 2023 not by last year's payment amount. I must have a look back and see if at the start of 2022 they also reduced our tax credits and included the Christmas 2022 amount.

 

[ClubMan]

Probably. But they have reduced the tax credits by the "new" pension payment amount that starts in January 2023 not by last year's payment amount.

In that case it's presumably to account for the taxation of pension income due to be received this year. I assumed from your original post that there were no pension related tax credit deductions on last year's statement.

I must have a look back and see if at the start of 2022 they also reduced our tax credits and included the Christmas 2022 amount.

You should do that alright.