Forces Pension & New Employment

Ali660

I've also put this thread on the Forces page but it may be more appropriate here ...

DH completed 22 yrs service earlier this year and has been employed since then through an agency so monthy take home pay varies. For tax purposes his pension is counted as his main income and his agency pay is taxed at 20%.

Can anyone advise whether it is better to have your pension taxed at 20% and count the new job as main income? I've looked at the figures and think there is a modest difference of approx £300 per annum but when DH called the Tax Office back in April to ask their advice they said there would be no difference?

Any advice gratefully received.:beer:

fengirl_2

If both sources of income exceed the personal allowance of £6475, then it makes no difference which is the main source of income - the tax bill at the end of the year will be the same.
If, however, the pension, say, is under £6475, then you need to contact the tax office and explain this so that they can allocate the spare allowances to the job.

dzug1

There is ulimately no difference - the tax on your total income is the same however you add it up.

There CAN be a difference in what you pay each month - but it will all get sorted out at the end of the tax year when you submit a return.