Will my husband be entitled to the increased Personal Allowance for over 65s?

Catfriend

My husband will be 65 on 16th April 2009. He intends to continue working for another year and defer his State Pension until he finally retires in April 2010. We are a little confused, however, as to whether he will be entitled to his over 65 tax allowance of £9,490 for the tax year 2009/2010. His gross salary is only around £10,000 pa and this is his only income. He recently completed a Pension Enquiry Form sent to him by the tax office, and was expecting that his coding would be reduced to allow him to earn up to £9,490 before tax. However today he received a letter saying 'I am not able to issue an amended code number until you actually start to receive the National Insurance Retirement Pension. An amended code number will therefore be issued to you later.'

Does this mean that, despite being aged 65, he will only be entitled to the standard personal allowance of £6,475?

I can't help feeling that some wires have been crossed somewhere along the line and he will be ringing HMRC next week to clarify the situation, but I want to get our facts right before he does. Also, he has never been sent an Age Exemption Certificate to give his employer so he will not have NI deducted in future. Does he have to ask for this separately?

Our thanks to anyone who can help clear up this confusion.

jem16

Catfriend wrote: »

Does this mean that, despite being aged 65, he will only be entitled to the standard personal allowance of £6,475?

The age related allowance is just that - age related. You start to lose some of it once income hits £22,900 but your husband is well under that so he should get the full allowance of £9490

I can't help feeling that some wires have been crossed somewhere along the line and he will be ringing HMRC next week to clarify the situation, but I want to get our facts right before he does.

Sounds like HMRC are assuming he will be retiring. Have you told them otherwise?

Also, he has never been sent an Age Exemption Certificate to give his employer so he will not have NI deducted in future. Does he have to ask for this separately?

Details of how to request one are here;
http://www.hmrc.gov.uk/faqs/nicqc1.htm#9

dzug1

HMRC tend to try to avoid giving the age allowance in a tax code until you have retired and hence know exactly what your state pension is going to be and can make allowance for the tax that may be due on it.

If you are not retiring it should be simpler, with no need to wait.

Catfriend

Thank you both very much. I am sure you're right and HMRC don't realise that my hubby won't in fact be retiring just yet. I never thought of that. Maybe he didn't fill in the form correctly and confused them (he isn't very good with tax forms but being a typical man wouldn't let me help).

Anyway, we will send off for the Age Exemption Certificate immediately and he will hopefully clarify the situation with the tax people next week.

Thanks again for your help - much appreciated.:T