Tax code for a 77 yr old help

Newly_retired

Since Household income is taken into account for Benefits, it ought to be the same for Taxes.

RichandJ

Newly_retired wrote: »

Since Household income is taken into account for Benefits, it ought to be the same for Taxes.

The old chestnut, if you were designing a tax & benefit system you wouldn't start from where we are. Afraid it's tax & benefit law built up over decades by politicians reacting to the problems of the day, rightly or wrongly that's where we are and the laws we have to work with.

When I first started in pensions admin mumble mumble years ago almost everyone working for a medium to large business had a final salary pension. Easy, x times y over z was the pension, tax free cash was (normally) 3x times y over 80 with a commensurately reduced pension. Where x = service, y = final salary & z = accrual rate. Now ? You wouldn't believe the complexity of working a pension out, almost all of it driven by legislation.

Must admit though I do not understand what seems to be some people's attitude that because you've 'worked all your life' you shouldn't pay tax on income in retirement. Income is income, and as I said earlier in the thread if you're above the income tax threshold you pay tax on that bit.

xylophone

OP - your mother should have received a Notice of Coding for the tax year 2012-13 from HMRC. sample for 08-09 here (layout a little different for 2012-13.) http://www.hmrc.gov.uk/p2/p2.pdf See also http://www.hmrc.gov.uk/rates/it.htm

The notice will show your mother's state pension for the new tax year (£5587?) deducted from her personal allowance (£10660)

This gives £5073 so your mother's tax code would be 507L

http://www.hmrc.gov.uk/incometax/codes-basics.htm

margaretclare

RichandJ wrote: »

Must admit though I do not understand what seems to be some people's attitude that because you've 'worked all your life' you shouldn't pay tax on income in retirement. Income is income, and as I said earlier in the thread if you're above the income tax threshold you pay tax on that bit.

I agree with you. DH and I have paid tax for most of our working lives, since age 16 (well, all right, I didn't pay it between 1961-65 and 1978-81). I can't work out how many years we've actually paid tax for, probably nearly a century between us, and we'll be paying it until they nail a lid down on us and drop us into a hole in the ground.