Tax code for a 77 yr old help

Tontodollydog

My mum is 77yrs old - I am sure she is on the wrong tax code. She is on an L code and am certain she should be on a Y code. Does anyone know if I am correct. Also can anyone tell me what the 73/ at the start of the code stands for and there is an A at the end? Thanks .

dunstonh

Also can anyone tell me what the 73/ at the start of the code stands for and there is an A at the end?

are you sure you are looking at the tax code and not the paye code?

Tax codes are typically numbers and one letter.
e.g.
747L
K497

The Y code applies to people aged over 75 who are eligible for the full personal allowance. Is your mum eligible for the full personal allowance or is it reduced? (income over £22,900, multiple income sources etc)

Around this time of the year you tend to be sent PAYE codings and they show you how your tax code is worked out. Have you looked at hers? (you can look at last years one to get an idea noting it will be last years figures)

Zelazny

http://www.hmrc.gov.uk/incometax/codes-basics.htm suggests that a 77 year old should be on a Y code if entitled to the full personal allowance. The 73/ and the A at the end both sound like something added by whoever sent you the code - can you tell us where you found it (pension statement, letter from HMRC, etc) and what it actually says in full?

Tontodollydog

She just phoned the HMRC up and they insist it is the correct code as it is not always the Y code for over 75s - she gets £1008 from a private pension which is just taking her over the allowance. The code she has given me to check out is 73/L614A. So any rises the government is giving her is getting taken off her through tax - grrr unfair

dunstonh

The code she has given me to check out is 73/L614A.

She has given you the wrong code. That is the code to identify the tax office and company paying the income.

So any rises the government is giving her is getting taken off her through tax - grrr unfair

Any rises the Govt gives will be subject to tax but she wont lose 100%. Also, given the wrong information is being looked at, I dont think it is a good idea to cry "unfair" yet.

Tontodollydog

dunstonh wrote: »

I dont think it is a good idea to cry "unfair" yet.

Fair enough - don't know anything about these things but looks like it is the correct code - considering she only has a private pension of £1039 and has worked all her life the government is giving with one and hand and taking the other then I would describe that as unfair and that was the point being made.

jennifernil

How can a private pension of £1039pa + State pension take her over the cut off point for the age related personal allowance?

It would barely take her into tax at all.

Are you sure you have your figures correct?

margaretclare

So she gets full state retirement pension plus a personal pension.

SRP: 5587

Personal pension: 1039

Total: £6626

As she's over 75 she'll be on maximum age-related personal allowance. £10,090 for the new tax year.

What's the problem?

RichandJ

Is the £1,008/£1,039 (varies from post to post) a monthly or annual income ?

If monthly might explain why tax is paid.

Oh, and agree with others that 'working all your life' doesn't exempt you from paying tax in retirement. Never has, never will - you get an income above the threshold then you pay tax on the excess.

margaretclare

RichandJ wrote: »

Is the £1,008/£1,039 (varies from post to post) a monthly or annual income ?

If monthly might explain why tax is paid.

Oh, and agree with others that 'working all your life' doesn't exempt you from paying tax in retirement. Never has, never will - you get an income above the threshold then you pay tax on the excess.

Absolutely agree. I think DH and I will still be paying tax if we live to be 100. We're on the maximum age-related allowances now plus married people's allowance which is shared between us. We still pay tax - not a great deal, but still, we pay some.

jennifernil

Yes, quite!

OH's pensions take him a little bit over the cut off point for the age allowance, so his marginal rate is unfortunately high.

And I only have a very small pension so, even with all our taxable savings/interest in my name, I wil not use even half of the age allowance.

Together, we are nowhere near 2 x the age allowance, it's a bit like the "loss of child benefit" anomaly.