paying tax on pension

webbit

I am doing this enquiry for my Dad. He retired early 62 and last year turned 65, his company pension is about £788 a month and a state pension of £97.65 a week.
Now he has a tax code of 9640 (65 years old) but they take of his state pension off his tax code, but the maths do not seem right. 9640 minus 5077 (£97.65 x52) equals 4563, but they keep coming back with a tax code of 388p.
Has anyone got a simple way to know what tax you should be paying with no savings but a company pension scheme and claiming a state pension.
He is still married to my mum and she claims off his NI contributions, even if you took this into consideration they get £156 a week (£8119 A YEAR) state pension.
What are we missing ? Something seems wrong

Loughton_Monkey

I suspect the answer has something to do with when he became 65.

Try doing some sort of 'pro rata' calculation for X days at age 64 - with no age related tax benefit, and (365-X) days with the age related benefit. See if that adds up (more or less). Could be they do it on a weekly (not daily) basis.

webbit

thanks for reply should have said that this has been on going for over a year he is over 66 now, i have found this
http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/BeginnersGuideToTax/IncomeTax/Taxcodes/DG_174936
and the example just about mirrors his position, where do they get 388p from??

Linton

Why not ring them and ask??? I have always found the HMRC helplines very helpful.

CLAPTON

Loughton_Monkey wrote: »

I suspect the answer has something to do with when he became 65.

Try doing some sort of 'pro rata' calculation for X days at age 64 - with no age related tax benefit, and (365-X) days with the age related benefit. See if that adds up (more or less). Could be they do it on a weekly (not daily) basis.

age related tax allowance isn't pro-rata-ed ..you get it for the full year in which you are 65

webbit

Linton wrote: »

Why not ring them and ask??? I have always found the HMRC helplines very helpful.

we have and always seem to come back with 388p

CLAPTON

webbit wrote: »

we have and always seem to come back with 388p

ask them for a wriitten statement of how it is calculated
it's got to be simple

Loughton_Monkey

CLAPTON wrote: »

age related tax allowance isn't pro-rata-ed ..you get it for the full year in which you are 65

That blows my theory!

mjm3346

Underpaid tax from previous year/s?

webbit

ok well he gets a bit extra for some reason on his state pension £107 a week something to do with serps, so his tax code is right, but his tax code will alter in April when they go up by 500, how much better off will he be and while we are on the subject how much better off will we be when ours goes up by 1000

jennifernil

An increase of £500 in allowances means he will be paying £100 less in tax.

For you, an increase of £1000 in allowances means £200 less tax, unless you are a higher rate tax payer.