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Splitting tax code
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kb1956
Posts: 41 Forumite


I have a pension from a previous employer but am also still working
Would it be better to split tax code between pension and salary allocate all tax code to work or pension OR does it not make any difference at all ?
Thanks
Would it be better to split tax code between pension and salary allocate all tax code to work or pension OR does it not make any difference at all ?
Thanks
0
Comments
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It will not make any difference providing the job pays over your tax allowance and you do not fall into the higher tax bracket.0
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I didn't think you had a choice. But then I'm a basic rate tax payer, so maybe it's just never occurred to me.0
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It will not make any difference providing the job pays over your tax allowance and you do not fall into the higher tax bracket.
Splitting the tax code would not help in any way with crossing over into the higher tax bracket.I didn't think you had a choice. But then I'm a basic rate tax payer, so maybe it's just never occurred to me.
You have the choice and can tell HMRC how you wish your tax code to be apportioned.
In most cases it will only help if neither of the 2 income sources are above the tax free allowance.
If one source is already above, then that is the one that should carry the main tax code. The 2nd source of income would then normally have a BR or D0 tax code.
However where you have to be careful is if each income source on its own does not go into higher rate but when added together the total does. In that case there may need to be a deduction on the main tax code to take the extra tax due. You should always let HMRC know the estimated total income for the tax year so that they can apply the correct codes.0
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