Tax on small works pension
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john_vgu
Posts: 3 Newbie
Hi, Ive just reached 65 and getting state pension topped up with pension credit. I paid into a works scheme, but my pension is very small, under £40 a month, I don`t have any proof of what I paid in and when it stopped. The first works pension was a part month payment as I it started mid month but had tax taken off, £3.60 out of £18.21, next month pension will be the full month £38 so assume tax will be £7, I just wondered if I should be paying tax. My state pension and pension credit comes to about £155 a week. I`m single by the way. Any advice welcome thanks. John.
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they are taxing you at 20% (taxcode BR) which is the normal taxcode for some-one with another income that uses the tax free allowance
however for some-one 65 you have a tax free (age related) allowance of 10,500
I'm afraid I know nothing of pension credits but your total income seems to be less than 10,500
I would suggest you phone HMRC and explain the situation0 -
Thanks for replies, no I haven`t filled in a p161. They sent me a p45 to hand to my next employer which seems odd when I`m 65. Total income would be well under £10,000 so I`ll contact them and see what they say.0
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Pension Credit is not taxable so you don't need to declare that part of it.0
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Thanks, didn`t know about the p45. I`ll post it off to them.0
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HMRC will allocate enough of your tax code to your pension provider so that you don't have to pay tax on it. If you have paid any it will be adjusted when they get the new code
The rest of your tax code can be allocated against your other income. If your income is less than your tax allowance you won't pay any tax at all.
HMRC were very helpful when I phoned them.0 -
katecheshire wrote: »The rest of your tax code can be allocated against your other income. If your income is less than your tax allowance you won't pay any tax at all.
HMRC were very helpful when I phoned them.
In the OP's case the personal allowance will be given to the private pension minus an amount equal to the state pension so that any tax due can be collected. This is because the state pension is taxable but paid gross.0
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