Tax Coding (personal allowence)

The_Ben

Hi, I have lurked in and around these forums for a while but i, as many get that kick needed to ask for help.

My father passed away suddenly, (although only 2 weeks ago) it does feel like an eternity.

Now what i am about to say may strike people as odd, and as a mark of respect won't divulge too much personal info, but basically he took care of the day to day running of the house.

My mams current tax code is k634 but this is due to change, but i am trying to work out a budget for her. From what i have read on the HMRC website although she has state pension, and a small monthly private pension this still needs to be treated as an 'income' at basic tax rate (without NI stamps)

Because she is in the 60-65 band, retired and claiming a pension would her tax free income be at the same level as someone who is 65 'retirement age'

I know gross figures but would like to be able to calculate net to put her mind at ease during these hard times

Any help would be appreciated

Mikeyorks

The_Ben wrote: »

Because she is in the 60-65 band, retired and claiming a pension would her tax free income be at the same level as someone who is 65 'retirement age'

You need to be more specific. The basic personal allowance applies up to 64(inc). The age related allowance from 65 onwards. But it's the age not 'status' that counts.

Bear in mind the 65+ age allowances are restricted if income exceeds £22900 ... on a sliding scale.

Full detail :
http://www.hmrc.gov.uk/rates/it.htm

The_Ben

Mikeyorks wrote: »

You need to be more specific. The basic personal allowance applies up to 64(inc). The age related allowance from 65 onwards. But it's the age not 'status' that counts.

Bear in mind the 65+ age allowances are restricted if income exceeds £22900 ... on a sliding scale.
/QUOTE]

Just turned 61, so she is still within the £6475 bracket even though retired ?

sleepless_saver

Put her income for the year into this website, taking care to choose the woman age 60-65 age band, and it will work out the tax for you.

It would be a good idea for her to do a benefit check when she feels up to it. Plus if she is now living alone, then she would be entitled to single person discount on her council tax.

Mikeyorks

The_Ben wrote: »

Just turned 61, so she is still within the £6475 bracket even though retired ?

Yes. As I said ..... it's her age rather than status that determines the personal allowance.

Her Code Number (K634) is a negative allowance. So there are deductions of around £12800. Her P2 (Coding Notice) should give you the detail ...... but it looks to be more than State Pension.

The_Ben

sleepless saver, thank you.

that is the clarification i needed i think have used the listen to the tax man website and entered figures without tax code and with and worked worse case. is the grey area of married, paying NI etc but the figure is still the same.

we have checked with the benefit office etc and is entitled to nothing, a little bereavement payment and an extra £30 on her pension and that is it.

It pains me to say, but does that not say something? my dad died 1 year before his retirement, worked hard all of his life for £30 a week and a couple of K that didn't even pay for the funeral?

Is it me or is there something wrong?

I am sorry for ranting, you have done nothing but be helpful

The_Ben

Mikeyorks wrote: »

Yes. As I said ..... it's her age rather than status that determines the personal allowance.

Her Code Number (K634) is a negative allowance. So there are deductions of around £1280. Her P2 (Coding Notice) should give you the detail ...... but it looks to be more than State Pension.

could you explain further on the K coding please i can't get my head round it

Mikeyorks

The_Ben wrote: »

could you explain further on the K coding please i can't get my head round it

HMRC explain it reasonably well here :

http://www.hmrc.gov.uk/incometax/codes-basics.htm#3


The tax checker link from post #4 will not give you the correct result without the Code number. And you must enter it as K634.

Otherwise you need to enter her gross income from all sources ..... then let it default to a basic allowance of £6475

The_Ben

i had a look around the HMRC website but couldn't see the above linky.

cheers Mikeyorks.

it is a touchy subject about the tax etc with me being the youngest, but the only income is state and teachers pension i will try again with the current k634

CLAPTON

tax is all about detail
a k code of 634 seems rather high to me as it implies an untaxed income of 6355 + 6475 = 12,730

can you post up the details of her income and the tax codes on each income (if applicable)

Mikeyorks

The_Ben wrote: »

i had a look around the HMRC website but couldn't see the above linky.

Don't understand?

If you just click on the above link it takes you straight to 'How the 'K Code' works'?