Over 65 Tax Allowance

formulaoz

I have just received my new tax code for 09-10. As I turn 65 in December I thought I would receive the increased tax allowance for over 65s but this is not the case. I have phoned my tax office and am told that I will not receive the higher allowance until I actually reach 65. The directgov site makes no mention of this. Has anyone else found a definitive answer to this. Would be most grateful for any advice. Thanks.

fengirl_2

Yes, you are entitled to this allowance from 6 April in the year you are 65. However, you will need to convince HMRC that your income for the year - salary, pension, state pension, investment income - will be below the income limit for this allowance.

formulaoz

When I spoke to my tax office this morning, they told me if they give the allowance now I would owe them money as my State Retirement Pension may be taxable. I said that would be dealt with through a new tax code but they would not budge. I am already retired and receiving a company pension. I am taxed PAYE through that pension. My income for the year will be well below the amount to get Age Allowance. The Inland Revenue is just blanking me. Any suggestions for how I can get them to respond? Many thanks.

RayWolfe

This is normal. You will get a new tax code, taking your state pension into account when you start to receive your pension (or when it is finally established and reported to HMR&C). It will happen. Stop worrying.

fengirl_2

If you know how much your state pension will be, you can let them know so they can include it in your code. However, I dont think they are playing straight as the allowance is clearly due. When you do receive your state pension, they code it out in such a way that you dont accumulate an underpayment (they include the annual amount so the underpayment is effectively collected from Dec to March).
I have not searched the HMRC website extensively, but this link relates to 08-09 and clearly states you are due the allowance in the year you are 65 (this has been the rule since fengirl was a baby tax inspctor).
http://www.hmrc.gov.uk/incometax/personal-allow.htm

Elaine_Wilson

The sticking point here is that they will not have details of your state pension yet. Do you have any documents confirming what you will receive once you are 65?

If not, then I think you will have to wait until you do have this information.

ceeforcat

Elaine_Wilson wrote: »

The sticking point here is that they will not have details of your state pension yet. Do you have any documents confirming what you will receive once you are 65?

If not, then I think you will have to wait until you do have this information.

In my day what happened was that you received all of the allowance from 6th April prior to the date you reach 65 (if it is your 65th birthday today you should have received it from 6th April 2008.) When you start to receive the state pension, your code will be reduced to take this into account - you will be taxed on an emergency basis until the end of the tax year. HMRC are automatically informed of this great event in your life.

I suspect that I may be somewhat older than fengirl, but this was how it was done when I was a baby taxman too!

isasmurf

http://www.hmrc.gov.uk/incometax/personal-allow.htm

In order to get the age-related Personal Allowance you need to complete form P161 Pension Enquiry.

formulaoz

Thanks for all your replies. It seems this is an extremely grey area! I'm not worried about eventually getting the allowance , just feel it should be payable from April as stated. It is impossible to get HMRC to acknowledge this, perhaps their need for money is greater than mine!! I would appreciate hearing from anyone who has had success in this area.

DeeCee

Checkout....
http://www.hmrc.gov.uk/manuals/inmanual/IN367.htm

Also.....

http://forums.moneysavingexpert.com/showthread.html?t=702667

BDI

Mikeyorks

jimmo wrote: »

I think this may be what you are looking for.

http://www.hmrc.gov.uk/manuals/inmanual/in368.htm

I think the OP will consider that's a radical way of getting the extra allowance?

The previous page (in367 .... link in previous post) ..... allows them to enjoy the result a little longer!