When does the K Code arrive?

Blue_Parrot

In just over two weeks, my partner's state pension starts. He already has (and has had for weeks) the HMRC Certificate of Age Exemption = no employee's NIC will be due from that date.

When does the K Code notice arrive? They know his state pension will start in just over two weeks, but until I get the K Code notice, applying his current L code notice will result in a huge underpayment of tax (on the state pension element). (We run our own business and I do the payroll.)

Any ideas? Thanks in advance.

jimmo

Mine wasn't a K code, but same principle. It was issued by HMRC 3 days after I became entitled to State Pension.
From memory, its done that way to ensure that nobody is taxed on SP before they become entitled to it.

sheramber

The amount of state pension will be deducted from the personal allowance and a code number based on the balance of allowances left will be issued to be applied for the rest of the year.

you only get a K code if your untaxed income is greater than your personal allowance so you are in a minus position

Goldiegirl

jimmo wrote: »

Mine wasn't a K code, but same principle. It was issued by HMRC 3 days after I became entitled to State Pension.
From memory, its done that way to ensure that nobody is taxed on SP before they become entitled to it.

This has been something that I've been wondering.


My husband will get his state pension in October. Will the DWP tell HMRC that he's getting his pension, and the tax code will be changed automatically, without any input from him?

Blue_Parrot

Goldiegirl wrote: »

This has been something that I've been wondering.


My husband will get his state pension in October. Will the DWP tell HMRC that he's getting his pension, and the tax code will be changed automatically, without any input from him?

The short answer is yes. In my own case it happened automatically. They're both government and talk to each other. The long answer is that State Pensions are not pre-taxed - how could they be? Therefore the State Pension is taxed after receipt. They (the Revenue) know you're getting it, therefore after they (pensions department) start paying it, then they (Revenue) start taxing you on it.

There is a philosophical debate to be had, viz: I've paid into the State all my working life by law, so why when I'm old enough to be paid the State Pension, do they tax me on it? One answer is that the Revenue will tax anything it can............

HTH

CLAPTON

Blue_Parrot wrote: »

The short answer is yes. In my own case it happened automatically. They're both government and talk to each other. The long answer is that State Pensions are not pre-taxed - how could they be? Therefore the State Pension is taxed after receipt. They (the Revenue) know you're getting it, therefore after they (pensions department) start paying it, then they (Revenue) start taxing you on it.

There is a philosophical debate to be had, viz: I've paid into the State all my working life by law, so why when I'm old enough to be paid the State Pension, do they tax me on it? One answer is that the Revenue will tax anything it can............

HTH

the 'normal tax free allowance is £11,000 which corresponds to a tax code of 1100L

to get a k code your untaxed state pension would have to be greater than 11,000 per annum
how much is your state pension?
do you have any other income which is taxable but not taxed at source?

Blue_Parrot

Confused here. Are you replying to me (Blue Parrot) or to Goldiegirl to whom I replied?

CLAPTON

Blue_Parrot wrote: »

Confused here. Are you replying to me (Blue Parrot) or to Goldiegirl to whom I replied?

to you
.................

Blue_Parrot

CLAPTON wrote: »

to you
.................

I'm K-coded. This thread isn't about me, however.

CLAPTON

I give up
.................

sheramber

Blue_Parrot wrote: »

The short answer is yes. In my own case it happened automatically. They're both government and talk to each other. The long answer is that State Pensions are not pre-taxed - how could they be? Therefore the State Pension is taxed after receipt. They (the Revenue) know you're getting it, therefore after they (pensions department) start paying it, then they (Revenue) start taxing you on it.

There is a philosophical debate to be had, viz: I've paid into the State all my working life by law, so why when I'm old enough to be paid the State Pension, do they tax me on it? One answer is that the Revenue will tax anything it can............

HTH

State pension is taxable because you didn't pay tax on the money deducted for your NI contributions. NIC is deducted before tax is calculated.

You have a personal allowance of tax free income and any income in excess of that amount is taxable.