nt tax code

mickyc_3

how does a 0 tax code affect pension payments? I am asking on behalf of a friend ( i don't pay into pensions and know little about them tbh) who has a non contributary pension. Will it continue to be paid?

Sorry if this is a little vague but it all i have at the moment and she's a little worried

fiveyearplan

I think non contributary are still paid but I know nothing about pensions.

jh2009

a 0 tax code means that you have no personal allowance left (eg you have probably used it on another income). Therefore any pension payment will be taxed in full at whatever tax rate applies.

If you have a tax code saying 545T for example, you can get £5450 tax free income before income tax (at 20% or 40% (if higher rate taxpayer) is applied).

If you have any queries, then any payslip should have a tax office address/number on it so contact them and ask for an explanation of this code. If theres no tax office details, the pension scheme should be able to provide these contact details for you.

JCS1

Hi jh2009,

I think it might be a little different in the OP's case, when you go bankrupt it is common to get a nil tax code for the duration of the current tax year, but then the tax you would normally pay gets paid over to the official receiver as payment into the bankrupcy estate. So it's not a case of allowances being used up elsewhere, it's so the OR gets the tax rather than HMRC.

HTH

Holes_in_my_pocket

My OR told me though they dont know of any reason why is this happens but it does.