Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • C_Mababejive
    • By C_Mababejive 10th Jun 17, 9:09 PM
    • 10,202Posts
    • 9,288Thanks
    C_Mababejive
    Tax on pension query..?
    • #1
    • 10th Jun 17, 9:09 PM
    Tax on pension query..? 10th Jun 17 at 9:09 PM
    Just asking this question for a friend who has retired in last couple weeks.

    With regard to work related pension, is it correct that it isnt taxed at source and that you have to do your own end of tax year return and pay whatever tax is due?? tnx
    Feudal Britain needs land reform. 70% of the land is "owned" by 1 % of the population and at least 50% is unregistered (inherited by landed gentry). Thats why your slave box costs so much..
Page 1
    • TadleyBaggie
    • By TadleyBaggie 10th Jun 17, 9:13 PM
    • 2,347 Posts
    • 1,695 Thanks
    TadleyBaggie
    • #2
    • 10th Jun 17, 9:13 PM
    • #2
    • 10th Jun 17, 9:13 PM
    The pension provider should be deducting income tax at source based on the tax code provided by HMRC.

    The exception is the state pension, which does not have tax deducted.
    • McKneff
    • By McKneff 10th Jun 17, 9:42 PM
    • 35,473 Posts
    • 45,665 Thanks
    McKneff
    • #3
    • 10th Jun 17, 9:42 PM
    • #3
    • 10th Jun 17, 9:42 PM
    As above, if any tax is due, it will be deducted from the work pension
    No one can make you feel inferior without your consent
    • dunstonh
    • By dunstonh 10th Jun 17, 10:08 PM
    • 88,855 Posts
    • 54,190 Thanks
    dunstonh
    • #4
    • 10th Jun 17, 10:08 PM
    • #4
    • 10th Jun 17, 10:08 PM
    State pension is probably what he is getting mixed up with. That isnt taxed at source.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • C_Mababejive
    • By C_Mababejive 11th Jun 17, 11:38 AM
    • 10,202 Posts
    • 9,288 Thanks
    C_Mababejive
    • #5
    • 11th Jun 17, 11:38 AM
    • #5
    • 11th Jun 17, 11:38 AM
    Thanks all,,i was just clarifying for a friend as im a bit of a way off my pension yet..

    Just another point,,,this person will possibly have to do a self assessment having been paye/never done a SA before. Would the state pension be included as a source of income for SA purposes and possibly therefore affect the total tax position at year end ?tnx
    Feudal Britain needs land reform. 70% of the land is "owned" by 1 % of the population and at least 50% is unregistered (inherited by landed gentry). Thats why your slave box costs so much..
    • dunstonh
    • By dunstonh 11th Jun 17, 11:41 AM
    • 88,855 Posts
    • 54,190 Thanks
    dunstonh
    • #6
    • 11th Jun 17, 11:41 AM
    • #6
    • 11th Jun 17, 11:41 AM
    Just another point,,,this person will possibly have to do a self assessment having been paye/never done a SA before. Would the state pension be included as a source of income for SA purposes and possibly therefore affect the total tax position at year end ?tnx
    #
    it would be unusual for someone who has never filled in a tax return to suddenly be told to fill in a full return.

    It is quite normal to be sent a summary form which just asks for income (single sheet of A4).

    Why would this person likely be sent a tax return?

    Pension income is income for tax purposes.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • C_Mababejive
    • By C_Mababejive 11th Jun 17, 12:12 PM
    • 10,202 Posts
    • 9,288 Thanks
    C_Mababejive
    • #7
    • 11th Jun 17, 12:12 PM
    • #7
    • 11th Jun 17, 12:12 PM
    tnx,,well we dont know, i guess it was just assumed that you would have to fill one in either of your own volition or be sent one,,. When you are working and just have maybe one regular income stream things are a lot clearer?

    Pension..so your saying that if the person exceeds their annual PA then the state pension could also become taxable?
    Feudal Britain needs land reform. 70% of the land is "owned" by 1 % of the population and at least 50% is unregistered (inherited by landed gentry). Thats why your slave box costs so much..
    • dunstonh
    • By dunstonh 11th Jun 17, 12:16 PM
    • 88,855 Posts
    • 54,190 Thanks
    dunstonh
    • #8
    • 11th Jun 17, 12:16 PM
    • #8
    • 11th Jun 17, 12:16 PM
    so your saying that if the person exceeds their annual PA then the state pension could also become taxable?
    Yes. Pensions are paid under PAYE. The same as an employed person. You get your tax code and its applied to your pension. You even get P60s.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • Silvertabby
    • By Silvertabby 11th Jun 17, 1:01 PM
    • 1,398 Posts
    • 1,636 Thanks
    Silvertabby
    • #9
    • 11th Jun 17, 1:01 PM
    • #9
    • 11th Jun 17, 1:01 PM
    “ so your saying that if the person exceeds their annual PA then the state pension could also become taxable?
    Yes. Pensions are paid under PAYE. The same as an employed person. You get your tax code and its applied to your pension. You even get P60s.
    Just to add, DWP can't/won't tax the State pension at source. Instead, the personal allowance code applied to other pensions/income is adjusted, thereby taking any tax due from the State pension from the other pension/income.

    This can cause no end of confusion!
    Last edited by Silvertabby; 11-06-2017 at 1:24 PM.
    • badmemory
    • By badmemory 11th Jun 17, 2:34 PM
    • 581 Posts
    • 574 Thanks
    badmemory
    The main scenario for having to do self assessment for someone like your friend would be if the tax due on the state pension (meaning state pension higher than personal allowance) plus the tax due on the other pensions came to more than half the other pensions. This is because, as yet, there is no tax code which can allow more than half an income to be taken in tax.
    Last edited by badmemory; 11-06-2017 at 2:37 PM.
    • comeandgo
    • By comeandgo 11th Jun 17, 2:54 PM
    • 1,726 Posts
    • 2,300 Thanks
    comeandgo
    My husband completes self assessment as he has a few work pensions and state pension. The first few years he always had underpaid tax as HMRC are a bit slow in getting tax codes to pension providers. Now everything is on even keel we expect/hope this year will be the last one.
    • Silvertabby
    • By Silvertabby 11th Jun 17, 3:00 PM
    • 1,398 Posts
    • 1,636 Thanks
    Silvertabby
    The main scenario for having to do self assessment for someone like your friend would be if the tax due on the state pension (meaning state pension higher than personal allowance) plus the tax due on the other pensions came to more than half the other pensions. This is because, as yet, there is no tax code which can allow more than half an income to be taken in tax. Posted by badmemory
    That does make sense - someone on a State pension of £13K (possible with full SERPS/SP2) and a tiny private pension could fall into that scenario.
    • xylophone
    • By xylophone 11th Jun 17, 3:02 PM
    • 22,425 Posts
    • 12,931 Thanks
    xylophone
    http://www.litrg.org.uk/tax-guides/pensioners-and-tax
    • C_Mababejive
    • By C_Mababejive 12th Jun 17, 7:46 PM
    • 10,202 Posts
    • 9,288 Thanks
    C_Mababejive
    Thanks all
    Feudal Britain needs land reform. 70% of the land is "owned" by 1 % of the population and at least 50% is unregistered (inherited by landed gentry). Thats why your slave box costs so much..
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

4,295Posts Today

10,828Users online

Martin's Twitter