Updated, 23.53

THE REVENUE COMMISSIONERS has written to 115,000 pensioners informing them that they will have to pay more income tax in 2012, after discovering that its records understated the amount they were receiving as State pensions.

The Revenue Commissioners identified the number after exchanging records on over 560,000 pension recipients with the Department of Social Protection.

This evening the Revenue said the people affected had either not reported their State pensions to the Revenue Commissioners, had under-reported their value, or had seen their circumstances change in some other way without notifying Revenue.

It said most affected pensioners would have to pay a “modest” extra liability, but that in some cases an individual could find themselves having to pay an extra €4,400 this year, or €8,800 in the case of a couple.

Those couples, the Revenue said, “will already have reasonably significant [non-State pension] income”. At least 2,500 of the affected pensioners had private income in excess of €50,000, it added.

The data exchange also found that 20,000 people would end up paying less tax, because their department income had been overstated.

The tax system provides that anyone over the age of 65 whose total annual income is less than €18,000 – or a couple whose income is less than €36,000 – does not have to pay income tax.

Anyone whose State pension is their sole income therefore does not have to pay income tax, though they may be liable for tax if they also have other income – such as a salary, or an occupational or private pension – as well as the State pension.