Tax code?

JS477

If you annual income is less than your personal allowance how do they work out a tax code?

e.g. annual income £8K personal allowance is £10K

[Deleted User]

Hi,

you wont pay any tax then, until your earnings exceed the £10,000.

p00hsticks

Your basic tax code isn't affected by your income unless you are earning over £100,000 a year . Otherwise you'll get the basic tax allowance of £10,000 represented by a tax code of 1000L, which the revenue may then adjust if necessary in orderto take account of things like untaxed income (e.g. state pension), benefits in kind from employers, underpaid tax from previous years etc.

JS477

So if your part of your income is from a pension provider what code do they get if your total income is less than £10K?

[Deleted User]

Hi,

well roughly, if same as State Pension,

your allowance is £10,000, say SP is £5500, so 10,000 - 5500 = 4500, you are allowed to earn £4500 before tax and your tax code would be 450.

zygurat789

p00hsticks wrote: »

Your basic tax code isn't affected by your income unless you are earning over £100,000 a year . Otherwise you'll get the basic tax allowance of £10,000 represented by a tax code of 1000L, which the revenue may then adjust if necessary in orderto take account of things like untaxed income (e.g. state pension), benefits in kind from employers, underpaid tax from previous years etc.

Unless, of course, you were born before 6 April 1948 in which case your PA is also reduced if you earn more than a mere £27,000.

jem16

JS477 wrote: »

So if your part of your income is from a pension provider what code do they get if your total income is less than £10K?

That depends on where the other part of the income comes from. Are you in receipt of the state pension or is your other income from elsewhere?