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HMRC have recently said that some pensioners are still being paid under old arrangements which were agreed between pension providers and HMRC which has resulted in a number of pensions being paid tax-free, even when some tax should have been paid.
They say that those affected were probably not aware of the arrangements or even that they should be paying some tax.
HMRC have told providers that the old arrangements have to end and to make sure that all new pensions which have started since 6 April 2007 are taxed correctly.
They have also asked the providers to send them details of all pensions which began before that date and which are being paid tax-free under an old arrangement.
HMRC explain that if someone is receiving a pension which started before 6 April 2007 and no tax is being deducted, nothing will normally change until after April 2008.
They expect to collect any tax due via the tax code.
