Over taxed?

vc10101

I have a RAF pension of 12k per year. I also earn 60k per year in my new job.

The Tax Man takes 40% tax from my pension and 40% tax on my salary.

Would making the pension my primary income help reduce my tax?

Is ther any way to reduce it?

I will pay what I should but...... 3 grown up kids to support....:(

Appreciate any help ?

notanewuser

Nope. You should complete a self assessment at the end of the year and your tax will be calculated on £72k annual earnings.

Your grown up kids should be supporting themselves.

vc10101

yup, the bank of mum and dad is alive and well but what can you do with no mortgages available unless 20% deposit unless.....you give tham more money.......

Good old self assessment.

No way for the little guy to avoid tax unless you pay an advisor even more cash...

R_P_W

Mortgages are available with less than 20% deposit. Quite easily at 15 % and with good credit history available at 10 or even 5.

notanewuser

vc10101 wrote: »

yup, the bank of mum and dad is alive and well but what can you do with no mortgages available unless 20% deposit unless.....you give tham more money.......

Good old self assessment.

No way for the little guy to avoid tax unless you pay an advisor even more cash...

If you're PAYE and in receipt of a pension then no, no way to avoid tax.

vc10101

Thanks for the advice guys. It was worth checking.

I am lucky to be in a good job.

The kids are trying to get good jobs but economy is a killer ! keep helping them I guess. Perhaps they will be good to me later... Hmmm

jem16

vc10101 wrote: »

I have a RAF pension of 12k per year. I also earn 60k per year in my new job.

The Tax Man takes 40% tax from my pension and 40% tax on my salary.

So presumably the tax code on your pension is D0 and the tax code on your job is 944L (could be less depending on whether or not you have any taxable benefits)?

If so only part of your salary will be taxed at 40%.

Would making the pension my primary income help reduce my tax?

No. As long as the tax codes are correct. Can you confirm what tax codes are being used?

notanewuser wrote: »

Nope. You should complete a self assessment at the end of the year and your tax will be calculated on £72k annual earnings.

There shouldn't be any need to complete a self assessment if both incomes are being handled under PAYE.

notanewuser

jem16 wrote: »

There shouldn't be any need to complete a self assessment if both incomes are being handled under PAYE.

With an income of £72k and talk of house deposits for children, I'm guessing there are savings accounts which won't be taxed at the right level.

FatherAbraham

vc10101 wrote: »

No way for the little guy to avoid tax unless you pay an advisor even more cash...

£72,000 pa is hardly "the little guy". You are richer than the vast majority of the UK population. See http://www.guardian.co.uk/society/datablog/interactive/2012/jun/22/how-wealthy-you-compared

Paying an accountant to advise on techniques to reduce your tax liability is a purely financial transaction -- you do it if the net result is likely to be positive. Why on Earth should you get personalized financial advice, which might enrich you, free?

Warmest regards,
FA

mania112

Earnings from Employment take priority over income from a pension - there's no way to change that.

Even if you could it wouldn't alter the tax owed.

You have a personal allowance of £9,440 (where no tax is paid)

then a 20% bracket of £32,010

before you fall into 40%

(and if you are ever fortunate enough to earn over £150k pa it becomes 45%)

Your sources of income are straightforward and fall into this structure by simply adding them together.

jamesd

vc10101 wrote: »

No way for the little guy to avoid tax unless you pay an advisor even more cash...

At £72k you aren't a little guy in income terms, you're a big guy in the top 4% of incomes in the country.

In 2010-11 there were just 650k people with reported incomes between £70k and £100k. A further 588k had incomes above that. There were 31.3 million total payers. That means you're in the top (650 + 588) / 31300 * 100 = 3.955 => 4% of incomes in the country.