pay tax on pension on earnings

liverpool34

hi im after a bit of advice for my mum.she gets my dads private pension after he passed away some years ago.the tax code on this is set at 647l her personal allowance. she now works as this is a secound income the tax code on this is 112 is there anyway this could be changed.so the person allowance was on her earnings and not the pension or is it set like this.i was thinking maybe its this way round as she got the pension before she got the job.she is 56 and not over state pension age if this makes a different
any advice be great

catfish50

Is any tax being deducted from the pension? If not, then the tax code of 112 on her earnings is presumably the amount of her allowance that's not being used up on her pension.

She should get a notice from her tax office to explain her tax code.

jem16

liverpool34 wrote: »

she now works as this is a secound income the tax code on this is 112

A 2nd income should have the tax code BR, otherwise she will pay too little tax.

Where did the BR tax code come from and is it for tax year 10/11 or 11/12?

liverpool34

thanks catfish50 for your reply ,that makes sense.il check if she pays tax on it.

jem16

catfish50 wrote: »

Is any tax being deducted from the pension? If not, then the tax code of 112 on her earnings is presumably the amount of her allowance that's not being used up on her pension.

If that's true then the total of her allowances would be £6475 plus £1125 making £7600.

Assuming this tax year, where does the extra £1125 of allowances come from as the normal personal allowance is £6475?

catfish50

jem16 wrote: »

If that's true then the total of her allowances would be £6475 plus £1125 making £7600.

Not unless the tax man has made a mistake -- always a possibility. But what I was suggesting to the OP is that perhaps the personal allowance is not fully used by the pension, and the balance has been applied to the income from work. That's what usually happens.

jem16

catfish50 wrote: »

But what I was suggesting to the OP is that perhaps the personal allowance is not fully used by the pension, and the balance has been applied to the income from work. That's what usually happens.

Yes I know that's what you are suggesting.

However for that to be true the 647L would be lowered to 535T for the pension and the remainder of 112T applied to the job. In other words the tax code split between the two sources.

The only way it can be 647L and 112L is if her total personal allowances are £7600. The letter applied is also usually a T when tax codes are split.

Mikeyorks

One could assume - in this case - we're talking 2011-12 and the (647 + 112 = 759) excess of £120 is a flat rate allowance. But the Code 647 applied to the pension is just too coincidental for it to be other than 2010-11?

jem16

Mikeyorks wrote: »

But the Code 647 applied to the pension is just too coincidental for it to be other than 2010-11?

I had thought of that which is why I asked for it to be clarified in Post 3.

However i don't think it's 11/12 as the OP says mum is working now and has been given a tax code of 112L.

catfish50

jem16 wrote: »

Yes I know that's what you are suggesting.

However for that to be true the 647L would be lowered to 535T for the pension and the remainder of 112T applied to the job. In other words the tax code split between the two sources.

The only way it can be 647L and 112L is if her total personal allowances are £7600.

Or if the OP was quoting the 647L from a tax code notice received before his mother went to work.

The letter applied is also usually a T when tax codes are split.

The OP said "112", not "112L".

jem16

catfish50 wrote: »

Or if the OP was quoting the 647L from a tax code notice received before his mother went to work.

Yes that's possible.

The OP said "112", not "112L".

True.