Sister received 4 tax codes through today. Are they right?

Nine_Lives

Just checking to see whether the information given is right.

Current situation: My sister is 21 & in college, which she finishes this year (May i think). She'll then be out of education, but also not in full time employment.

She works bit-part whenever she is called on during the school holidays, which isn't much. I think so far in this tax year she's earned about £200 - that's how much she's called on (£6.50/hr).

Due to being in education, she also receives some of my dads pension after he died last year.

So at the moment & for the foreseeable future, she's a NON tax payer.



Letter regarding the pension saying she'll pay tax: (Note: Februarys pension payment to her on the 15th, was for £355.68)


Updates for 2011-2012:



Updates for 2012-2013:





The question is quite simply:

* Are these figures correct?
* Is she being charged tax on her pension?
* Does it look like she's paid tax on the pension & if so how does she claim it back?

Too much here & there & it's bamboozled me.

dawyldthing

i think its right
a) shows what she will be paid - but it won't be taxed as its not high enough
b) is showing the tax allowance for the pensions for this year
c) is an adjustment as the tax allowance has been adjusted due to the pensions
d) is ready for Aprils new tax year
e) the new tax year pension allowance before tax.

its all lower than the tax allowance so she won't be taxed. She shouldn't be taxed on her job as she will earn less than the 7450 allowance - pension so has earned less than 5k for this year

cte1111

There are 2 tax codes for the current tax year (Apr11-Apr12) and 2 tax codes for the next tax year (Apr12-Apr13).

Everyone has a personal allowance. When you have more than 1 job / source of taxable income, then your personal allowance is split between the different jobs.

So for the current tax year, your sister's personal allowance is £7475. This means that she can earn up to that amount without paying tax. The allowance has been split between her employer and the pension people.

System

OK have sent 2 tax codes for each tax year 2011/12 and 2012/13.

They know how much the pension will be and have allocated some of her tax free allowance to that by entering it as a deduction against the codee operated by her employer.

So for 2011/2012 her personal allowance is £7475. They know her pension will be £2298 per year and so they deducted that from the £7475 allocated it to the pension and left £5177 for her employment. This means that no tax would be deducted from the pension and tax would only be deducted from the employment if her income exceeds £5177 this year.

They then uprated the estimate of her pension for 2012/2013 and to £3000 and deducted that amount from the 2012/13 personal allownce of £8105 and allocated the rest to her employment.

Mikeyorks

K_P83 wrote: »

The question is quite simply:

1. Are these figures correct?
2. Is she being charged tax on her pension?
3. Does it look like she's paid tax on the pension & if so how does she claim it back?

1. They should be ....... as this is the split she should have asked for? From your previous thread on this subject. The Codes for the pension will allow it to be paid free of tax. (Provided the pension is not inflation proofed)

2. Charged at 20% (BR) on the initial payment(s). Which should be refunded in the next payment following Capita bringing the 11-12 Code into operation.

3. Covered at 2 ...... and in previous thread.

Nine_Lives

Thanks guys. Sorted.

Mike - i imagine the payment has already been refunded (i'm guessing) as the Capita letter said £191 per month, but as i said in OP, she was paid over £300 in Feb. I'm guessing this would be any tax refunded? (& therefore, no claiming left for my sister to do)

jem16

K_P83 wrote: »

Thanks guys. Sorted.

Mike - i imagine the payment has already been refunded (i'm guessing) as the Capita letter said £191 per month, but as i said in OP, she was paid over £300 in Feb. I'm guessing this would be any tax refunded? (& therefore, no claiming left for my sister to do)

What tax code was used in January and in February?

Nine_Lives

jem16 wrote: »

What tax code was used in January and in February?

Just found the original thread i made regarding this...

She has 2 payslips from May 2011 & June 2011 which both state 747L.

So i imagine 747L then.

jem16

K_P83 wrote: »

So i imagine 747L then.

I was referring to the tax codes used by Capita in January 2012 and February 2012 as you said she was paid £300 in February as opposed to £191.

The Capita letter says her tax code would be BR.

Mikeyorks

K_P83 wrote: »

she was paid over £300 in Feb. I'm guessing this would be any tax refunded?

Unlikely. As the payment (due 15th and therefore processed days earlier) is before the Codes were issued.

The scanned letter from Capita indicates there were £232 of arrears from the initial estimated 70% payment. If you add that to the 1st instalment (£191) and subtract 20% tax from the total ...... I can't get it to the £355 but - at £340 - it's not far off.

no claiming left for my sister to do

........ there's clearly tax to be refunded - but it doesn't have to be 'claimed'. Capita should refund it with the 15/3 payment once they've activated the issued 11/12 Code.

Savvy_Sue

Just to add that if you have more than one source of income, it's entirely plausible that you'd have more than one tax code.