Pensioner tax help required

TCannoyed

I have a relative has recently become a widow. She has been trying to sort out how much she is going to live on. Unfortunatley the tax system is too confusing and we need some help.

These are the amounts she has been told she will be receiving:

£144.24 State Pension PER WEEK
£340.49 Husbands company pension shes entitled to PER MONTH

Tax Code 139P

Personal allowance on coding notice £7090

Can anyone help us find out how much she has to live on each week?

Robert_Sterling_3

OK here goes:-

£144.24 per week i. e. £7500.48 pa
£340.49 per month i.e. £4085.88 pa

Total income £11586.36 pa

Income Tax

£7090 @ 0% £000.00
£2020 @ 10% £202.00
£2476 @ 22% £544.72

Total Tax £746.72

Income £11586.36
Tax £746.72

Remaining £10869.34

Per week Approx £209


If sole occupant of property 25% discount on council tax
Make sure to request this 25% off.

edda

I agree that total income is £11586.36 pa

Income tax
£7090 @ 0% £0
£2090 @ 10% £209
£2406 @ 22% £529.32

Total tax £738.32

Nett £10848.04

£208.62 per week (over 52 weeks)

But don't forget any other benefits - e.g. winter heating allowance

This is for someone in the age range 65 to 74. 75+ has a personal allowance of £7220 and free TV licence, for example

There is a v. good booklet available from doctors, Benefits Agency etc on allowances for elderly people

TCannoyed

is what confused me in that i thought you multiplied it by 10 and added 9. The 139p though wouldnt make sense as it would make £1399 which would be a very small allowance.

Robert_Sterling_3

The tax code number is slightly tricky in this case.

In a straightforward case you take the total of the tax free allowances

[ 7090 ] away from the total income [ 11586 ] which gives 4766 and then drop the last digit. Hence 476 P would be the code.

The P denotes age from 65 to 74.

However

Complication number one ..... Two sources of the income.
Complication number two ..... Part of year not widow
Part of year Widow.

ctm_2

Robert_Sterling wrote:

[ 7090 ] away from the total income [ 11586 ] which gives 4766 and then drop the last digit. Hence 476 P would be the code.

Umm. No. That is not how tax codes are worked out.

To work out the code, the total allowances of 7090 are taken. Then deductions are made. In this case, the only deduction is the State Pension of 5695 (I got to this figure by working backwards from the code you have told us about already. This equates to roughly 40 weeks state pension using the amount you mentioned.)

So:
Allowances 7090
Less Total Deductions 5695
Allowances left 1395

So, take the 1395, knock off the last number, and add a P giving 139P.

Without knowing any more information, it's difficult to say wether that code is correct or not. There are a number of factors. i.e the date the pensions became payable, and how much will actually be recieved in this tax year, and the exact make up of the code (will be shown on the P2 Notice of coding).

amanda40

The full amount of pension for the year would be included ( or should be) included in the code, if not then there would be an underpayment by the end of the year. The pro rata amount would the be assessed at the year end.