Pension & Redundancy Tax Calculation

Kwakker

Can someone please help me with calculating my income tax liability for 2016/17?

I took voluntary redundancy in March 16 but was not paid off until April so any tax is due to the 16/17 year.
At the same time, I accessed my company pension.
My redundancy payment was £50110 (so £20100 taxable) & I have received £27610 (pre-tax) in pension payments.
My annual allowance was £11000 & I had no other income.

I am assuming that this gives me a total taxable income of £47710 - £11000 p.a. which would be £32000 @ 20% and then £4710 @ 40%. (£6400 + £1884) so £8284

Is this correct as it is nothing like the figures given in my personal tax account on the Gov.UK website. Mind you, it seems that the website can't even get the basic fundamentals right....even to the point of how many months there are in a year (they say eleven but even this consists of 2 x Julys & no January or February!)
They also show a list of "monthly" payments which don't add up to the total that they show at the bottom so I think I can be forgiven for not trusting their numbers.

Dazed_and_confused

Based on your post I get £47720 taxable income so £4720 taxed at higher rate (assuming no you have gift aid payments to notify HMRC of).

Total tax due for the year would be £8,288.

As far as gov.uk is concerned I think you might be confusing HMRC's information with the real time data your employer and pension provider have supplied to HMRC. If you are looking at the monthly payment details then certainly on my personal tax account they just show the data my employer has sent to HMRC.

How much tax was deducted during the year and did you have any adjustments to your tax code (which could be relevant to calculating your tax) or was it just 1100L last year?

Kwakker

Thanks for the reply.
According to Gov.UK, I received a taxable VR payment of £20107.55 on which I paid £7889.81 in income tax. These figures are confirmed on my last payslip.

On my pension, the site is showing 11 payments as previously mentioned (ie, 2 x Julys & no Jan or Feb) The totals at the bottom of these columns are £31320.89 pre-tax & £4062.20 tax was paid.

However, when you actually add up these columns, the numbers come to £25373.94 & 3216.74 respectively.

In addition, the website is now telling me that I have underpaid & I owe £741.20 which it is putting down to overpaid marriage allowance? (My wife is a non taxpayer & did sign over part of personal allowance when we thought I would only pay basic rate tax but I can't see that the application was acted on)

Also, during the year, I made contributions of £8000 into a SIP so I assume I should also be able to claim back the higher rate tax?

Linton

Kwakker wrote: »

Thanks for the reply.
According to Gov.UK, I received a taxable VR payment of £20107.55 on which I paid £7889.81 in income tax. These figures are confirmed on my last payslip.

On my pension, the site is showing 11 payments as previously mentioned (ie, 2 x Julys & no Jan or Feb) The totals at the bottom of these columns are £31320.89 pre-tax & £4062.20 tax was paid.

However, when you actually add up these columns, the numbers come to £25373.94 & 3216.74 respectively.

Are these the dates when the company actually paid the contributions into your pension but the listed total is what was paid according to your payslip? For tax purposes it's the payslip total which matters, not when the money actually reached your pension.

Also, during the year, I made contributions of £8000 into a SIP so I assume I should also be able to claim back the higher rate tax?

Yes, you should tell HMRC about the SIPP payment or put it in your tax return if applicable.

Kwakker

Linton wrote: »

Are these the dates when the company actually paid the contributions into your pension but the listed total is what was paid according to your payslip? For tax purposes it's the payslip total which matters, not when the money actually reached your pension.

These are payments out of the pension, not contributions. I began drawing the pension after taking VR. I am going to have to go back through my bank statements to find what was actually paid to me & when. But all I will get from that is the post-tax amounts & then I will have to calculation the deductions based on the assumption that the monthly pre-tax amount was the same for each month.

Kwakker

Looking back, I've seen that the first pension payment was received into my bank account on 23 March 2016 so should have been counted in the 15/16 tax year. However, for some reason it seems to have been carried over into 16/17. Or maybe counted twice???

squirrelpie

I began drawing the pension after taking VR. I am going to have to go back through my bank statements to find what was actually paid to me & when. But all I will get from that is the post-tax amounts & then I will have to calculation the deductions based on the assumption that the monthly pre-tax amount was the same for each month.

As I understand it, your pension administrators should be sending you payslips that detail what they have paid you and what they deducted in tax, at least whenever the payments change. Unfortunately payslips don't explain why they paid those amounts and I think you'd have to ask them if you don't understand. Your bank statements are a good check on the payslips.

Kwakker

squirrelpie wrote: »

As I understand it, your pension administrators should be sending you payslips that detail what they have paid you and what they deducted in tax, at least whenever the payments change. Unfortunately payslips don't explain why they paid those amounts and I think you'd have to ask them if you don't understand. Your bank statements are a good check on the payslips.

Thanks, I'll have to contact the Pension Scheme as I don't understand why the figures that HMRC are quoting are different from what I have actually received. I think that the timing spanning two different tax years may have somethng to do with it.