Tax & Pensions jungle

Miss_Trust

I have recently changed jobs in the last year and now contribute to a company pension scheme. During the last job I contributed and still contribute to a private pension scheme.
I have been a 40% tax payer during these periods.
I have now been informed that as I now contribute to a company pension the private pension should be closed down as it is illegal due to tax reasons and that the tax man can claw it back.
I have recently received my tax code for next year and it is D0 which means I have no allowances at all. It also states that I owe £12,000 in back tax which as a PAYE employee I find hard to digest as there are no perks attached to my job.
Is this the tax man now clawing back on my private pension.
Would it be best to move it to an offshore account or whatever or just close it down and let him have it. I have now stopped contributing.

zagfles

Miss_Trust wrote: »

I have recently changed jobs in the last year and now contribute to a company pension scheme. During the last job I contributed and still contribute to a private pension scheme.
I have been a 40% tax payer during these periods.
I have now been informed that as I now contribute to a company pension the private pension should be closed down as it is illegal due to tax reasons and that the tax man can claw it back.

That's rubbish, it used to be the case many years ago but now you can have as many pensions as you want. Though there are limits on how much you can contribute and get tax relief on. But they are quite high, usually £50k or all earned income whichever is lower.

I have recently received my tax code for next year and it is D0 which means I have no allowances at all. It also states that I owe £12,000 in back tax which as a PAYE employee I find hard to digest as there are no perks attached to my job.
Is this the tax man now clawing back on my private pension.
Would it be best to move it to an offshore account or whatever or just close it down and let him have it. I have now stopped contributing.

No, your tax code implies this is a second job, it should only be used if you've got another job paying £42k+ !! It sounds like they still think you're working in your previous job as well! Did you give your employer the P45 from your old job?

mania112

So long as you've only ever contributed <100% of your salary, the problems you're having are nothing to do with pension contributions.

And you can have a personal and company pension at the same time.

In fact, being higher rate, you should be receiving tax back (because only 20% tax relief would have been applied to your contributions, but you were owed 40%).

- not sure if this is a genuine question?!

Miss_Trust

zagfles wrote: »

That's rubbish, it used to be the case many years ago but now you can have as many pensions as you want. Though there are limits on how much you can contribute and get tax relief on. But they are quite high, usually £50k or all earned income whichever is lower.

No, your tax code implies this is a second job, it should only be used if you've got another job paying £42k+ !! It sounds like they still think you're working in your previous job as well! Did you give your employer the P45 from your old job?

I can't understand that. I'm in this latest job due to a merger of my last and latest employer. I would assume all the tax implications would have been done by people who knew what they were doing. If that's not the case, who do I speak to to get this sorted out? Everything seemed fine before this merger took place.

zagfles

Miss_Trust wrote: »

I can't understand that. I'm in this latest job due to a merger of my last and latest employer. I would assume all the tax implications would have been done by people who knew what they were doing. If that's not the case, who do I speak to to get this sorted out? Everything seemed fine before this merger took place.

Speak to the tax office. Did you get a PAYE coding notice? They should have sent you one before applying this code. See http://www.hmrc.gov.uk/incometax/code-wrong.htm