New Income Tax Checker

jem16

Maggie100 wrote: »

I used the tool but was confused as I have a state pension and private pension I earn 27000 per year this is made up of 18500 private pension and 8500 state pension I was not sure which income to enter. As my tax is paid from my private pension and not my state pension.

It should be your total income. However the tax tool will never really work correctly for you as more than one income source can confuse it.

My tax code is 189t but I thought the tax code should end with a P as I am over 65 yrs and retired

The T code usually means that something in your tax code just needs checking at the end of the tax year. It doesn't make any difference to your tax though.

When did you reach 65? If it was after April 2013 then the higher personal allowance doesn't apply to you so the P suffix wouldn't be used anyway.

guy999

Confused as to pension contributions?
It says if you...pay into a pension via the PAYE system on a monthly basis, enter the amount here.
I have, I am a 40% tax payer, paying in £400 per month direct on my payslip into a works pension.
Therefore assume I don't pay tax on this this and so the full £400 goes in.
But it says £560 per month into my pension pot?

How can this be I have paid no tax, to add the tax back?

Can anyone explain
Cheers

jem16

guy999 wrote: »

Confused as to pension contributions?
It says if you...pay into a pension via the PAYE system on a monthly basis, enter the amount here.

Are you referring to the Self Assessment form?

I have, I am a 40% tax payer, paying in £400 per month direct on my payslip into a works pension.

Can you clarify - is the pension contribution taken off your payslip before you are taxed or after you are taxed?

Therefore assume I don't pay tax on this this and so the full £400 goes in.

It can be. Some contributions are paid from gross pay and some from net pay.

But it says £560 per month into my pension pot?

What is "it" here? Where are you getting the £560 from? It doesn't sound like tax relief as the figures don't match up with basic rate tax relief.

Could it be your employer's contribution?

guy999

Jem 1, thanks for your reply.

Its from the Income tax calculator on mse, on this tool is a link that says discuss tool/tax which opens into this thread...
when you click pension contributions per month info button...
If you pay into a pension via the PAYE system on a monthly basis, enter the amount here...

£400 then converts this to £560 going into my pension pot

As I haven't paid tax on this, how can £560 go into my pension
Thanks

booksurr

guy999 wrote: »

Jem 1, thanks for your reply.

Its from the Income tax calculator on mse, on this tool is a link that says discuss tool/tax which opens into this thread...
when you click pension contributions per month info button...
If you pay into a pension via the PAYE system on a monthly basis, enter the amount here...

£400 then converts this to £560 going into my pension pot

As I haven't paid tax on this, how can £560 go into my pension
Thanks

because the MSE calculator makes various assumptions that it does not explain properly therefore making it very easy to misunderstand the output
400 x 40% = 160
therefore as far as the calculator is concerned mathematically your pension pot receives 400 + 160 tax relief = 560

BUT in the real world...
IF that 400 is from PAYE post tax income AND the pension pot is a company scheme then it has already has tax relief applied as you have paid less tax on your salary and the tax credit has been claimed by the pension provider

IF the pension is outside of the company then the pension company is only allowed to claim basic rate tax and it is up to you to claim the remaining 20% via your tax return. What you then do with that extra 20% cash is up to you

guy999

Thanks booksurr, understand now!

theonehodge

This tool is fantastic. Can I just confirm th at it takes into account the different tax brackets as well. (for example it works out the 20% portion and the 40% portion of tax on a salary and not just a flat rate on the whole salary)?

jonthedog

Thanks for this tool - really useful!
It would be fantastic if it could show the working, though, so it's possible to see exactly how the numbers are calculated. I'm trying to put a quick model together in Excel so it would be useful to just copy the rough calculations being done, i.e. tax at each band, N.I. calc, etc.

catfoley

When I use the new take home pay calculator it is adding a deduction for HMRC pension which I have never had deducted before.
Could anyone shed any light?
Many thanks

MrMoore

Remember in 2015 to 2016 you can get up to £11,600 tax free with the new £1000 of free bank interest!