HMRC has recently begun to check if tax is due from self-assessment taxpayers who have received state pension arrears. The work by HMRC is being done by a dedicated team with letters issuing from mid-April 2023. A copy of the letter is also being issued to authorised agents.
HMRC will only collect income tax for 2023/24 and the previous four tax years. Taxpayers who died before the Department for Work and Pension (“DWP”) paid the arrears will not be charged tax. Since 2020, the DWP has been paying arrears of state pension to individuals who were underpaid with this work expected to continue until 2024.