Retiring and P45

Milliemum55

Hello, I wonder if one of you good people can help please.

I have retired from work at the Civil Service and my pension is due to come into payment on 1 June. I also have a slightly larger pension coming into payment on the same date from a Previous Bank employer. I understand that I have been put on a temporary tax code.

My Civil Service employer has now sent me all 3 parts of the P45. Clearly I don't have a new employer to send Parts 2 and 3 to so had assumed these should go to the larger pension provider so they could get my tax code corrected. Having finally managed to get through to HMRC, they tell me I should keep all three parts. Not sure this is right? If I Have the forms how will my tax code get corrected?

Can anyone please tell me the usual procedure re the P45 if one is retiring and will be in receipt of 2 private pensions. I have tried to get hold of both pension providers but it's the weekend etc and I am away from home next week!

Thanks in advance and apologies for what probably seems a silly question.

molerat

Generally you would send the P45 to the largest pension provider. The 2nd would then normally tax at BR. If this year's pay + first provider pension for the remainder of the tax year is below your tax allowance you would then speak to HMRC to have some of the allowance set against the second pension.

Milliemum55

Many thanks. That makes sense to me more than my hanging on to the forms as advised by the Tax Office!

zygurat789

Milliemum55 wrote: »

Hello, I wonder if one of you good people can help please.

I have retired from work at the Civil Service and my pension is due to come into payment on 1 June. I also have a slightly larger pension coming into payment on the same date from a Previous Bank employer. I understand that I have been put on a temporary tax code.

My Civil Service employer has now sent me all 3 parts of the P45. Clearly I don't have a new employer to send Parts 2 and 3 to so had assumed these should go to the larger pension provider so they could get my tax code corrected. Having finally managed to get through to HMRC, they tell me I should keep all three parts. Not sure this is right? If I Have the forms how will my tax code get corrected?

Can anyone please tell me the usual procedure re the P45 if one is retiring and will be in receipt of 2 private pensions. I have tried to get hold of both pension providers but it's the weekend etc and I am away from home next week!

Thanks in advance and apologies for what probably seems a silly question.

Pension is really deferred salary.

CLAPTON

Milliemum55 wrote: »

Hello, I wonder if one of you good people can help please.

I have retired from work at the Civil Service and my pension is due to come into payment on 1 June. I also have a slightly larger pension coming into payment on the same date from a Previous Bank employer. I understand that I have been put on a temporary tax code.

My Civil Service employer has now sent me all 3 parts of the P45. Clearly I don't have a new employer to send Parts 2 and 3 to so had assumed these should go to the larger pension provider so they could get my tax code corrected. Having finally managed to get through to HMRC, they tell me I should keep all three parts. Not sure this is right? If I Have the forms how will my tax code get corrected?

Can anyone please tell me the usual procedure re the P45 if one is retiring and will be in receipt of 2 private pensions. I have tried to get hold of both pension providers but it's the weekend etc and I am away from home next week!

Thanks in advance and apologies for what probably seems a silly question.

what's best depends upon how much the pensions are.

Milliemum55

Thanks for the replies. The main pension is just very slightly over the basic annual personal tax allowance by just a few pounds and the other is quite a bit less. I guess therefore that the allowance will be against the larger pension and the smaller taxed fully at basic rate.

I just wasn't sure of the best place to send the P45 to get off the emergency tax code as soon as possible. I know it will probably all work itself out in the end but didn't want to pay any more tax than I had to.

CLAPTON

you can simply tell HMRC what your wishes are : it would make sense for the tax code to be allocated to the pension above the tax allowance and BR to the lower

in later years, if the tax allowance goes up more than your pension, you can tell HMRC to split the allowance between your two pensions

mgdavid

CLAPTON wrote: »

you can simply tell HMRC what your wishes are : it would make sense for the tax code to be allocated to the pension above the tax allowance and BR to the lower

in later years, if the tax allowance goes up more than your pension, you can tell HMRC to split the allowance between your two pensions

^^this;
just call HMRC, explain you are newly retired, quote the tax references for all incomes/pensions and the amounts. HMRC will agree that your PA goes against the larger pension, the smaller will be taxed at BR and they'll issue Coding Notices accordingly. I did this last autumn and it was all sorted within about a week.

jimmo

When I retired from the Civil Service I didn’t get a P45 but my employer passed on the details to my pension payer.
That worked just fine for me moving from a single employment to a single pension.
In your case there seems to be some danger that, particularly if you pass your P45 to the payer of your bank pension, you will receive the benefit of your Personal Allowance twice, once against the Civil Service pension and again against your bank pension.
How you handle that really depends on your attitude. A Tax underpayment is an interest free loan to some people but a millstone to others.

zygurat789

CLAPTON wrote: »

you can simply tell HMRC what your wishes are : it would make sense for the tax code to be allocated to the pension above the tax allowance and BR to the lower

in later years, if the tax allowance goes up more than your pension, you can tell HMRC to split the allowance between your two pensions

You have an unalienable right to have your personal allowance allocated wherever you choose, HMRC are legally bound to do as you tell them. It doesn't matter which pension you allocate however much of your personal allowance to the tax will be the same in total.
What you have to avoid is either having your allowance given twice, once to each job, or being unutilised by all of it being given to an income source of less than the allowance. Also when you draw the state pension which is taxable, but paid to you gross, the whole of the pension will reduce your personal allowance.
To avoid any futue hassle I would tell HMRC to allocate the allowance in such a way as to ensure that you have at least a couple of thousand ponds or more of taxable income on each pension so that there is no chance of the allowance and future increases exceeding the income source.
You will probably always have to keep your eye on this.

Milliemum55

Apologies for the delay. Many thanks to all for the advice. I will speak to HMRC again and try to get this sorted out. Although I have the Bank pension references, I am still waiting on a letter from MyCSP ( the smaller pension provider) with their details. From other threads it seems MyCSP have a less than stellar reputation in sending/paying out what is due.��