Personal tax allowance

Bletch_2

I have a pension and a salary both are more than the personal tax allowance. HMRC have asked which I want my personal tax allowance to be set against - does it matter? I will pay the same tax from my total income surely.

System

The easiest would be to put your PA against the pension. You wouldn't then have to juggle things around if the salary stopped.

jem16

Bletch wrote: »

I have a pension and a salary both are more than the personal tax allowance. HMRC have asked which I want my personal tax allowance to be set against - does it matter? I will pay the same tax from my total income surely.

Yes you will pay the same tax on total income in the end.

If both your pension and salary is above the personal allowance of £8105 then it will make no difference as to which income the tax code is attached.

However if one is below the personal allowance and the tax code is attached to that, you will not get the benefit of all your tax free allowances and will initially overpay tax. If both are below the personal allowance you may be better splitting the tax code.

What are the amounts for salary and pension?

zygurat789

What you should attempt is to ensure that all your personal allowance is given against a higher source of income so as to avoid having to claim any surplus.
The personal allowance is about to increase to 9205 from 5 april 2013 and it would appear that the government intend to increase it to 10K before the next election and it should increase in the years after that.
When you start to draw your state pension the personal allowance will be reduced by the amount of the state pension.
So long as your private pension will be in excess of the personal allowance then it would be administratively simpler to have your PA given against your private pension and after you receive the state pension it would probably, but check your figures, never exceed your private pension and you never need to be bothered by them again

zygurat789

Malcnascar wrote: »

Please read what the OP wrote

You really should follow your own advice 'cos if you don't no one else will.

jem16

Malcnascar wrote: »

Please read what the OP wrote

In the absence of punctuation, it could mean both together are more than the personal allowance or both, as in each, are more than the personal allowance.

kidmugsy

jem16 wrote: »

In the absence of punctuation, it could mean both together are more than the personal allowance or both, as in each, are more than the personal allowance.

Quite so. "Each" is an underused word.