Query about State Pension Application

whitesatin

seven-day-weekend wrote: »

I hope that is not per month:eek::eek::eek:

LOL, I wish it was! That would mean that my pension was a fortune.

I pay roughly £100pm in tax.

zygurat789

JohnB47 wrote: »

Yes, if his Teachers pension income uses up all of his tax allowance, he'll pay 20% tax on all of his State Pension income. Assuming he's a basic rate tax payer. Not too bad, considering that the payments he made towards his state pension weren't taxed.

It's been a long time since that was the case.

zygurat789

seven-day-weekend wrote: »

Yes, his Personal Allowance is set against his Teachers' Pension. His IB is paid gross, as will be his State Pension (although they are both a taxable Benefit) and the tax taken from his TP. It will just be more tax, however

The more you earn the more tax you pay, that's how it works.
Make very sure that all these taxable benefits which are paid gross are included in the code number, thoroughly check the P2 (coding notice) telling you what your code number is. If this is not right it may lead to an underpayment if tax which HMRC WILL find with their new system and WILL demand repayment.
There are, potentially, three things to look for, state pension deduction, IB deduction and, maybe, an age allowance restriction if his total taxable income exceeds £26,100 for 2012/13. This will increase for 2013/14 but we may not know the amount until March next year.

xylophone

an age allowance restriction

If he was born after 5 April 1948 this won't be relevant?https://www.gov.uk/income-tax-rates

seven-day-weekend

zygurat789 wrote: »

The more you earn the more tax you pay, that's how it works.
Make very sure that all these taxable benefits which are paid gross are included in the code number, thoroughly check the P2 (coding notice) telling you what your code number is. If this is not right it may lead to an underpayment if tax which HMRC WILL find with their new system and WILL demand repayment.
There are, potentially, three things to look for, state pension deduction, IB deduction and, maybe, an age allowance restriction if his total taxable income exceeds £26,100 for 2012/13. This will increase for 2013/14 but we may not know the amount until March next year.

He will lose his IB when he gets his State Pension, but thanks for the advice, we will make sure that the State Pension is included in the tax code. His State Pension is about £80 a week more than his IB.

His income will not exceed the amount you mention - in fact it will be about £10k less.

seven-day-weekend

xylophone wrote: »

If he was born after 5 April 1948 this won't be relevant?https://www.gov.uk/income-tax-rates

Yes it will

xylophone

Yes it will

But if born after that date he simply won't have an age allowance?

seven-day-weekend

xylophone wrote: »

But if born after that date he simply won't have an age allowance?

That is correct. (Sorry, I mis-read your first post - I thought you said it would be relevant).