Tax Code for 90 year old.

JanCee

My relative is aged 90, their tax code for 2013/14 has just been received & the code has changed from 506Y to 96Y even though their income has only gone up in line with the usual pension increases.

On the 2012/13 notification the state pension/benefits is estimated at £5595, on the 2013/2014 notification the state pension/benefits is estimated at £9698.

The difference between the 2 amounts seems to be that the previous coding only included the basic state pension whereas the latest one includes; Pre 97 additional state pension, extra - basic state pension, graduated retirement benefit & age addition. These additional amounts add up to an extra £74 per week.

So my question is, which coding is correct? Should these extra amounts always have been included.

This is the first time I have ever checked their coding as it has never changed by this much before & I have always assumed it to be correct.

Dazed_and_confused

All State Pension is taxable

http://www.hmrc.gov.uk/manuals/eimanual/eim74601.htm
http://www.hmrc.gov.uk/manuals/eimanual/eim74602.htm

What you do in this situation is another matter!

jem16

JanCee wrote: »

So my question is, which coding is correct?

The 96Y sounds correct if your relative is receiving that amount of state pension.

Should these extra amounts always have been included.

Yes if they were being received?

Has there been the death of a spouse recently that has seen the state pension entitlement being changed?

xylophone

Have you checked your relative's statement of coding P2 (from HMRC) for say 3 of the previous years against the letter from The Pensions Service (BR 5899) for those same years?
http://www.scopulus.co.uk/taxsheets/uktaxrates2006-7.htm

JanCee

There has not been any death of spouse recently. In fact their partner died 12 years ago.

I have never been asked to look at their notice of coding before as it never changed by much & therefore always looked ok relative to the previous years.

I only checked it this time because there was such a big difference between the codes for 2012/13 & 2013/14.

jem16

JanCee wrote: »

There has not been any death of spouse recently. In fact their partner died 12 years ago.

I suggest you check then that your relative is actually receiving the amount estimated. If it is correct and has been for the last however many years, then technically tax may be owing depending on total income.