tax code for pensions

tony_one

I got my tax code yesterday for 2011/2012 it had on it predicted under payment £3450 for year 2010/2011 and because of this would not give any allowance for my private pension of £150 a month so i will pay tax on my private pension. I phone the tax office and they said as I got my pension in January 24th they cant put part years in for pension so they have class me as having a full year pension that what the under payment was,until they get the end of year earnings from my pension I wont get a code for my private pension,I said I could not afford to pay tax on my private pension as I am finding it difficult now they said there is nothing they could do.I know I will get it back but what do I do in the mean time is there anybody else I can get on to to sort it out? thanks for any advice.I am sorry its so long

CLAPTON

really not enough information here

perhaps if you tell us what your income(s) were in 2010-11 and how they were taxed

and what your incomes will be for 2011-12 and the taxcodes

and if you are a state pensioner (and when if either of theses years

tony_one

thanks clapton my erning for 2010/2011 to april is state pension from jan 24th to april is £1368.50
private pension to april is £ 322.06
esa to jan 24th (retirement age) is£3749.37
total 2010/2011 is£5439.93 which i paid no tax right code
the total for 2011/2012 is state pension £7413.64
private pension for 2011/2012 is£1932.36
total for year is£9346.00 tax sent to me k37?
hope this helps thanks clapton

jennifernil

How can you have an underpayment for 10/11 of £3450, if you had income below the tax threshold?

Did you have any income other than what you gave above?

tony_one

thanks jennifernil thats what i ask them they said they had calulate my pension over 12 months bit cant do anything till i get my p60 and send it in,i said it redicules that i will be tax when i cant afford it and wait for then to decide when to give it back. thanks for your reply i dont no what to do next.

CLAPTON

I would suggest you phone again and speak to some-one different
have the figures for each of you incomes and explain that your total income was below the tax free allowance and so you can't owe anything at all

assuming you are over 65 then your income for next tax year will be below the tax threshold too.

molerat

Phone again and ask to speak to a supervisor and give them the figures and explain it will cause hardship. The problem is that the call centres are now full of monkeys and not tax men like in the old days. Common sense dictates that they either use the part year figure or leave it until you have the P60 and reclaim anything due from you afterwards.

The last time I had a problem it took 3 phone calls, the last guy saying what the hell are they playing at and correcting it immediately

Mikeyorks

tony_one wrote: »

thanks jennifernil thats what i ask them they said they had calulate my pension over 12 months bit cant do anything till i get my p60 and send it in,i said it redicules that i will be tax when i cant afford it and wait for then to decide when to give it back. thanks for your reply i dont no what to do next.

Did you complete a P161 (Pension Enquiry) just prior to getting the State Pension. As that is what appears to be missing.

WillowCat

Hubby had notice of coding through this morning for tax year 2011/12 as well - with a tax demand for £1400.

He had previously been a non taxpayer as his state pension and private pension combined were less than the personal allowance.

In the current tax year however due to him now getting a full years adult dependency increase he is just over the threshold. Not a problem - a new code for 2010/2011 was sorted last December and he's started paying tax on his private pension.

The coding this morning said he'd underpaid by £1400 tax - and they were going to collect it from his private pension.

When we rang it turns out that they don't know at this point how much his private pension is (it's about £1,000 pa) so they assume that the private pension is high enough to use ALL of his tax free allowance and hence ALL of the state pension should be subject to 20% tax. So they made the assumption that he hadn't been paying this 20% on his state pension between April 2010 and December 2010.

At first they said they couldn't rescind the notice of coding, but it would all be sorted out in a few months when they have his P60 from private pension. However in the meantime they would try to take £150 a month tax (from £94 per month income:rotfl:).

When even they realised how silly this would be, they said he could go on self assessment for 2010/2011, which means he'll fill in a tax return and send a cheque for the actual amount of tax he owes for this year (about £120 - a bit less than £1400). He will then start with a clean slate from April.

I think this may be a similar situation to yours - they are making assumptions about income which are wildly inaccurate. Ask them straight out if you can do self assessment for tax year 2010/2011 (which on your figures will then prove you owe no tax) and then get a notice of coding going forward with no arrears

System

WillowCat wrote: »

....

Ask them straight out if you can do self assessment for tax year 2010/2011 (which on your figures will then prove you owe no tax) and then get a notice of coding going forward with no arrears

Opting to go for Self Assessment would not be a good choice in my opinion.

When anyone is about to start drawing their pension, HMRC should ask you to complete form P161 so that you can let them know what your income will be from the state pension, any private pension(s) and any other taxable income too.
HMRC P161 info

Then HMRC should be able to set an appropriate tax code based on the forcasted income. I assume you will have received a statement or letter from your pension provider which tells you how much you will be receiving.

WillowCat

BAA1 wrote: »

Opting to go for Self Assessment would not be a good choice in my opinion.

When anyone is about to start drawing their pension, HMRC should ask you to complete form P161 so that you can let them know what your income will be from the state pension, any private pension(s) and any other taxable income too.
HMRC P161 info

Then HMRC should be able to set an appropriate tax code based on the forcasted income. I assume you will have received a statement or letter from your pension provider which tells you how much you will be receiving.

That's a great idea with the benefit of hindsight, but it's a bit late now - the coding notice has been presented.

This is about how to resolve the problem.