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What does code 125p

oldwitter
oldwitter Posts: 18 Forumite
in Cutting tax
Over 65 and got a tax code of 125P does anyone know what that means, last year it was 8P

Comments

  • System
    System Posts: 178,412 Community Admin
    10,000 Posts Photogenic Name Dropper
    The P means that you are over 65 and entitled to the full allowance. The 125, I think, means that you have an extra £1250 allowance on top of your normal personal allowance..
    This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com
  • molerat
    molerat Posts: 35,688 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 31 January 2012 at 2:35PM
    Firstly which financial year is this for, is this a coding notice for next year ? If so next FY you are allowed to earn £1255 per year before tax. The P means you are aged 65 - 74 and eligible for the full tax allowance. I assume your state pension will be £9245 next year, 10500 - 9245 = 1255. Your state pension is not taxed at source so any tax due will be claimed from any other income you may have by a reduced tax allowance.
  • agrinnall
    agrinnall Posts: 23,344 Forumite
    10,000 Posts Combo Breaker
    molerat wrote: »
    Firstly which financial year is this for, is this a coding notice for next year ? If so next FY you are allowed to earn £1255 per year before tax. The P means you are aged 65 - 74 and eligible for the full tax allowance. I assume your state pension will be £6850 next year, 8100 - 6850 = 1255. Your state pension is not taxed at source so any tax due will be claimed from any other income you may have by a reduced tax allowance.

    It'll be more than that due to the increased personal allowance from 65, currently £9940 for 65-74 and £10090 for 75 and over (I'm not sure what the 2012/3 figures will be).
  • xylophone
    xylophone Posts: 45,912 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    http://www.direct.gov.uk/en/Nl1/Newsroom/DG_200224
  • molerat
    molerat Posts: 35,688 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    agrinnall wrote: »
    It'll be more than that due to the increased personal allowance from 65, currently £9940 for 65-74 and £10090 for 75 and over (I'm not sure what the 2012/3 figures will be).
    oops, edited ;)
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