PAYE Tax Code

Retire

What is the PAYE tax code and tax allowance for 2011 - 2012 for a man who becomes 65 on the 12th Oct 2011?

sueturnersmith

Presumably the man will start to receive a state pension on reaching 65, so it depends on how much he earns and how much pension he receives. His tax code will usually have to include a deduction for his pension, because there is no facility for taxing state pensions at source.

Why not contact your tax office and ask?

MrsManda

You'll get a better answer on the tax board but the personal allowance for people who are 65 in the financial year 11/12 is £9940 unless your 'adjusted net income' (i.e. minus allowances/reliefs such as gift aid deductions) is over £24,000.
If your income is over £24000 then your personal allowance is reduced.

http://www.hmrc.gov.uk/incometax/personal-allow.htm

So I think the PAYE code would be 994P unless you are not entitled to the full age related personal allowance due to high income.

994 because the personal allowance is 9940 and P to show you're eligible for the full personal allowance.
http://www.hmrc.gov.uk/incometax/codes-basics.htm

Retire

Why not contact your tax office and ask?

They were contacted.

A new tax code of 122T has been issued for the tax year 2011 to 2012.

According to them that is correct.

Retire

You'll get a better answer on the tax board

Which tax board?

MrsManda

Retire wrote: »

Which tax board?

This one: http://forums.moneysavingexpert.com/forumdisplay.php?f=22

Have you asked for a breakdown of how the HMRC calculated your tax code? This should explain why your tax code is what it is.

It may be helpful for you to read the 'personal allowance and adjusted net income' document on the HMRC website
http://www.hmrc.gov.uk/incometax/personal-allow.htm

Are you receiving income of £100,000 or more?

Retire

Are you receiving income of £100,000 or more?

I wish.

I always read that board as council tax for some strange reason.

sueturnersmith

As I posted above, your state pension cannot be taxed at source, so they have to take it out of your tax code which is used for your wages/occupational pension. You obviously have enough income to make you eligible to pay tax, and state pension is taxable. Therefore your tax code has been reduced to cover this.

If, at the end of the tax year, the amount of tax you have paid is proved to be incorrect, you will either get a repayment, or will have to pay more tax next year, depending on whether there was an overpayment or underpayment.

boo_boo_bear_2

11/12 allowance £9940 minus annual amount of state pension leaves the balance of your allowance to be used against any other PAYE income source.
Hope this helps