Early Retirement....First Week

jem16

mazzy wrote: »

My new code is 1060L

Does the letter say it's to be used in a special way?

chucknorris

dano17439 wrote: »

lol well done on early retirement. How long will it take until you start flicking through your local paper to see if theres any part time dream jobs in there?

I've already done that, I initially retired (sort of) in my early 40's, but I went back to work 5 years ago at 52 to start a new career, part time (80% fractional). But now I am l looking forward to retiring from that this December, there will not be any return to work for me, I can guarantee you that. Good luck in your retirement OP.

Jack_Itin

Had a discussion with a chap at work, who is in a similar position to me......he is part time 3 days a week, where as I am on zero hours....he said that his tax was all sorted out, without having to ring HMRC......so have decided to give it a couple more days before I ring them again..... (tried this morning but could not get through).....any thoughts as to whether this is the right decision ??......... Jack.

jem16

Jack_Itin wrote: »

Had a discussion with a chap at work, who is in a similar position to me......he is part time 3 days a week, where as I am on zero hours....he said that his tax was all sorted out, without having to ring HMRC

If one source of income is more than the personal allowance of £10,600 then this would be allocated the main tax code and the pension would be given BR. So no problem and easy to sort.

any thoughts as to whether this is the right decision ??......... Jack.

As I said your situation is different as neither source will fully utilise your personal allowance on its own. Your best option is to have the tax code split which HMRC cannot do without information on your expected income.

molerat

I remember a job interview - internal promotion - when I was 41.
Q: Where do you see yourself in 15 years time.
A: Retired

I got the job and fulfilled my wish. The guy asking me never made it to any sort of retirement.

gadgetmind

molerat wrote: »

I remember a job interview

I don't 'cos I've never had one! I've never had to write a CV either.

I aim to hit retirement with this record intact, which will be a nice achievement.

Jack_Itin

I have today received a letter from HMRC saying that my new tax code is BR.........my works pension comes to just under £6000 a year.........presumably this means that I will not pay any tax on it ?........Jack.

jem16

Jack_Itin wrote: »

I have today received a letter from HMRC saying that my new tax code is BR.........my works pension comes to just under £6000 a year.........presumably this means that I will not pay any tax on it ?........Jack.

No it doesn't. With a BR tax code you will pay 20% tax on all of it. Is this the tax code for your pension or for your zero hours contract?

As I said before you need to phone HMRC and get it all sorted with split tax codes. What happened when you phoned them?

Jack_Itin

O.k Jem thanks........but are you not allowed £10.600 before paying any tax ?......this is just for the works pension.......my zero hours earnings will only be a very small amount, and won't put me above £10600 with both combined...........Jack.

jem16

Jack_Itin wrote: »

O.k Jem thanks........but are you not allowed £10.600 before paying any tax ?......

Yes you are and you would be able to claim a rebate at the end of the tax year if both incomes combined were less than £10,600.

this is just for the works pension.......

So BR for your pension at £6000pa and 1060L for the zero hours contract?

This is probably the worst way it could be. Even round the other way would have been better.

my zero hours earnings will only be a very small amount, and won't put me above £10600 with both combined...........Jack.

Which is why I've told you to phone HMRC and get your tax code split between the two sources of income.

As it currently stands, your Personal Allowance of £10,600 is being set against your zero hours contract which will allow you to earn £10,600 tax free. However you're never going to be earning this amount so your allowances are going to waste. However HMRC don't know this as you've never told them how much you're likely to earn with this job.

Meanwhile your 2nd source of income is being taxed using a BR tax code which is perfectly normal for 2nd sources of income as it assumes your first source of income is using up all of your tax-free personal allowance.

However in your case this isn't happening and although you will be able to claim it back at the end of the tax year, it seems more sensible to avoid it in the first place. The reason I have suggested phoning HMRC is so that you can tell them how much you are likely to receive from each source of income. Once they know this they will be able to issue more suitable tax codes which should see your Personal allowance split. If they don't suggest it then you should ask for it to be done. With a code of something like 600L for the pension ( or maybe a wee bit higher to give you some leeway) and a code of 460L you would avoid paying tax.

So you really need to phone HMRC if you want this fixed.