No tax allowance given on pension – don’t know why, advice please.

Grrra

Hi,
I have a, 'Statement of Retirement Benefits' which does indeed have a forecast of my pension for the year ahead and which states, 'initial payments use an emergency tax code until the Tax Office informs us how much tax to take from your pension via your tax code'. But no tax code appears on this paperwork.
Nor have I received any communication from my pension provider or the tax office regarding my tax code or changing my tax code.

The Prudential is the annuity provider. I have the following parts of the P45; 1A, 2, and 3. The, 'Statement of Retirement Benefits' shows my main pension not the annuity.

I think you are absolutely correct, I do not have sufficient information for you to advise me. But, in many respects you have done so and I may get some sleep tonight instead of worrying about things.

So, Monday morning will be spent trying to find out, 'tax codes'. I will let you all know about future developments. I just hope and pray that they have got it wrong.

Once again your advice is much appreciated.
Take care.

jem16

Grrra wrote: »

Hi,
I have a, 'Statement of Retirement Benefits' which does indeed have a forecast of my pension for the year ahead and which states, 'initial payments use an emergency tax code until the Tax Office informs us how much tax to take from your pension via your tax code'. But no tax code appears on this paperwork.

The emergency tax code is 747L either used on a cumulative or non-cumulative basis. This is obviously what happened inititally.

Nor have I received any communication from my pension provider or the tax office regarding my tax code or changing my tax code.

You should have received a P2 coding notice so I would definitely phone HMRC.

The Prudential is the annuity provider. I have the following parts of the P45; 1A, 2, and 3. The, 'Statement of Retirement Benefits' shows my main pension not the annuity.

Part 1 would go to HMRC. Part 1A is for you to keep. Parts 2 and 3 should have been given to your pension provider. This would have allowed them to use the tax code from your employment and given them details of tax paid to date.

getmore4less

You will need to look at all other income for the year you can't asume the share of the allowance will be available

What was on the p45.

jem16

getmore4less wrote: »

You will need to look at all other income for the year you can't asume the share of the allowance will be available

Why would the personal allowance not be available?

Grrra

Hi,
First of all many many thanks for your wonderful support.
Update:

I ‘THINK’ it is now sorted...

I phoned the HMRC who informed me that I had been put on the BR rate. They had taken my pension from the Pru’ (the smaller amount) as the main one with my allowance going on that. My larger pension they had taken that as secondary and taxed that at the BR rate.

I was assured that I would receive monies owed. Although they didn’t really fully explain why they made the Pru my main pension provider – I can’t remember ticking any boxes saying that the Pru was my, ‘main’ pension provider...

Strangely enough, today I received in the post two tax codes; one for my main pension 430T and one for the Pru’ 380L. As, I would only be receiving around £2000 per annum with the Pru, I would have been losing my full allowance. This would have resulted in about £27 a month less.

The HMRC have assured me that they will apply the full allowance £8105 to my larger pension (making that one my main one) and the smaller Pru’ pension will be taxed at the basic rate of 20%.
I ‘HOPE’ it is now sorted.

Once again many thanks for your support and advice which was very much appreciated.
Take care.

jem16

Grrra wrote: »

]I phoned the HMRC who informed me that I had been put on the BR rate. They had taken my pension from the Pru’ (the smaller amount) as the main one with my allowance going on that. My larger pension they had taken that as secondary and taxed that at the BR rate.

I did wonder if that was what had happened.

I was assured that I would receive monies owed.

Are they changing the codes right away?

To be sure of your refund you will need to check your total income at the end of the tax year and make sure you have not paid too much tax. If necessary you may then have to apply to HMRC for a rebate.

Although they didn’t really fully explain why they made the Pru my main pension provider – I can’t remember ticking any boxes saying that the Pru was my, ‘main’ pension provider...

You won't have. It will just have happened that way if the Pru one was paid first. If both at the same time, the computer probably just picked one.

Strangely enough, today I received in the post two tax codes; one for my main pension 430T and one for the Pru’ 380L. As, I would only be receiving around £2000 per annum with the Pru, I would have been losing my full allowance. This would have resulted in about £27 a month less.

You wouldn't have lost your full allowance. According to those tax codes, £3800 was being allocated to the Pru so you would have missed out on £1800 of your allowance during the tax year. Then you would have had to claim a rebate at the end of the tax year.

The HMRC have assured me that they will apply the full allowance £8105 to my larger pension (making that one my main one) and the smaller Pru’ pension will be taxed at the basic rate of 20%.

So for the tax year 2012/13 you should have the tax codes 810L on your main pension and BR on the Pru annuity. Just make sure that's what happens in April and all should be fine. You should receive two P2 coding notices before this so keep an eye out for them.

Grrra

Thanks very much Jem16 for the valuable advice and I will follow up what you have said.
Nice to know there are people around such as yourself willing and able to help others who have very little idea about the tax system.
Much appreciated.
Take care.

jem16

Grrra wrote: »

Nice to know there are people around such as yourself willing and able to help others who have very little idea about the tax system.

No problem at all.

Come back if you have any further questions.