tax code for pensions

System

WillowCat wrote: »

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.

So if HMRC are normally prepared to accept the figures you provide on a P161 form, why would they not accept figures from you without having to complete a tax return ???

SA would be a sledge hammer to crack a nut, bad idea, in my opinion

Simply keep on at HMRC until they accept the reality of the values you can give them.

jennifernil

This all seems really silly!! If a code number is not correct, they encourage you to ring up and give them the correct info so they can sort it. My OH has never had any problem doing that in the past, so why are HMRC being daft here. I would certainly be ringing again to get this sorted.

dori2o

Ring bck and exdplain thatn in the first year that state pension is coded that the correct proceedure is to remove any potential underpayment. This is how it has been for years. If they refuse ask to speak with a manager.

The state pension in the first year has to be input in full, UNLESS, even with the amount you receive in state pension it will not make you a tax payer at any rate. The reason for this is to ensue that as close a possible to the correct tax is paid at the end of the year.

Example.

Pension starts October 2010 and is £100 per week, the taxpayer has another income of £10 which is taxed via PAYE. Therefore will be payable for 6 months/26 weeks. Total actual pension for the year £2600.

If £2600 is put into the code, then for the rest of the year the code would collect an extra £43.33 per month. so over 6 months would collect £260.

However, the tax due on the £2600 is £520. So by putting the full years amount in the code of £5200. during the final 6 months the code would cololect a further £86.66 per month, so over 6 months would collect the correct amount of £520.

Putting in the annual figure creates a potential underpayment that i incorrect as the system thinks that £5200 is the extra income. So, in this case, as the correct amount of tax should be collected by using the annual figure, the pitential underpayment should not be carried forwards.

As I said, phone again and if you get no joy with the advisor, ask to speak with a team leader.

molerat wrote: »

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

This is completely uncalled for. Do i come to your place of work and call you a w@nker.

molerat

Several posters on these forums have used that generalisation about employees of my former employer (and to some extent I agree with them).

I will therefore stick by my generalisation owing to my experience of contacting the tax office, only the third person I spoke to could see that there was anything wrong with my tax codes.

jennifernil

tony one.......were you 65 in January this year?

If so you should have the age related tax free allowance for the whole of 2010/11.

Did they use that in their calculations of this "predicted underpayment"? I don't think it looks like they did.

tony_one

thanks for all your advive, i did fill a p161 form in january 2011 and i paid no tax on my private penisions as i was below my £9940 for the year, but they kept sending me differant tax codes i had to ring several times to get it right, i have rung ten times trying to sort this out but they wont hear of it they said wait for my p60s then they will try to sort it. but in the mean time i will be paying tax which i cant afford,i am at my wits end with them they dont seem to care.thanks again for all your replies.

tony_one

thanks dori20 i phone up again and mentioned what you had said and the person i got this time agreed and put it right, thanks very much all of you for some good advice.