Tax Codes

jennifernil

Due to needing to pay the tax on his state pension, OH has a K code on his company pension.

Even though the personal allowance has increased by £1000 this year, his tax has not reduced.

Should his company pension payer have increased his code by the extra £1000 allowance? Or do they need a new code from HMRC? (which has not been issued as far as we know)

He has of course also had an increase in his state pension, so that would need to be taken into account too, but it is nothing like the £1000 increase in allowances.

BoGoF

Yes the pension payer would need a new coding from HMRC. I take it he is below the income limit for age related allowances?

jennifernil

Thanks, that is what I thought. I wonder why no new code has been forthcoming?

No, unfortunately (or fortunately!) he is well over the limit for the age allowance, so only has the standard allowance.

BoGoF

jennifernil wrote: »

Thanks, that is what I thought. I wonder why no new code has been forthcoming?

No, unfortunately (or fortunately!) he is well over the limit for the age allowance, so only has the standard allowance.

Just realised what you originally meant - the standard £1000 allowance increase, I thought you meant additional age related allowances. Normally all pensioner cases receive a notice of coding annually. Best to phone HMRC I think.

jennifernil

Yes, he has been a pensioner for 4 years now, but only gets the standard personal allowance as his company pension is very good.

Should I dig out his most recent Coding Notice to find a phone number? He seems to get letters from a different office every time they write to him!

Sobraon

Watch out if the company pension people say that they have not received an update of coding and HMRC insist they have sent it (I speak from experience).
HMRC seem to distribute tax codes electronically so if you ring them, ask them to send it again, and then ask the person on the phone to "drill down" to confirm delivery. If the "drill down" shows a problem with delivery they will fax a copy to the company pension agency/dept if you give permission.

jennifernil

Right, update.....

We were away from home from mid March to late June, so there was a LOT of mail to go through!!

Now I have been through all the piles, I have found that HMRC have sent OH a new code of 65L for this Tax Year, but his pension payers are not using it. Presumably they will claim they didn't get it, OH is waiting to hear back from them.

The company paying out his pension was changed in January, and he now has a new tax office according to the new company, but on the Notice of Coding, HMRC still give the old company, so do we presume they have sent it to the wrong place? And that the old providers have not passed it on?

I really don't like the way the new lot do things. They only send out a payment slip if there is a difference of more than £1 from the previous payment, so you have no record of the code number they are using in a particular month.

System

I seem to remember other threads on here where an employer / pension provider has changed (after a buy out for example) and the tax records of employees have not been updated immediately with HMRC.

It is likely that his Employer PAYE reference number will have changed in January, check on his last P60 and compare with a previous P60 and with the P2 Coding Notice just received to see if the correct reference number is being used by HMRC

My pension provider works in a similar way, only sending a payslip if there is a significant change from the previous payslip. But, they do send a payslip if the tax code changes too.

jennifernil

Yes his reference number has changed according to the new payer, but the one on the Notice of Coding he has received, AND on his paper SA return received presumably in April sometime, is still the old one.

Is it the responsibility of the new payer to inform HMRC of the change?

System

It is the previous payer that should have informed HMRC.
See towards the end of this web page : http://www.hmrc.gov.uk/paye/payroll/close-or-change.htm

It says:

If your business and its payroll is taken over

If your business and its employees are taken over by another employer, you must inform HMRC of the change.

However, since they do not seem to have done the above, if I were you, I would phone HMRC and let them know the new Employer details. (Name, Address, Reference number and Date effective from)

jennifernil

OH finally managed to speak with both Pension Payer and HMRC.

Pension Payer has had nothing from HMRC, so Coding Notice has gone to previous Payer and not been forwarded.

HMRC say Previous Payer have not notified them of the change.

Moreover, despite OH having retired almost 4 years ago, they still have him working for previous employer. This despite OH having filled up forms re pensions and submitted 3 SA Returns since then. (And paying the correct tax)

Why do these supposed "professionals" not manage to get things right?

HMRC are to send Code Number to New Payer, so hopefully it will be sorted soon.