Should my dad be paying tax?

T1m2k2

Hello,

I’m trying to do a bit of a money makeover on my parents finances.

My father is retired and has been claiming his teachers pension since 2010. He had an additional job until 2014. I’ve checked his P60 for the end of the 2015 tax year and he’s on a BR tax code.

The pension he receives is around £9000 per year and has been his sole income since 2015, his P60 for the same year says he’s payed around £2000 in tax. I haven’t dug out his other P60s but they will likely be the same.

Should I be calling HMRC and asking for a rebate?

McKneff

If it is correct, he should be calling them, they wont speak to you.

How old is he, is he not receiving state pension

T1m2k2

He’s 63, he took early retirement a few years ago.

Yes sorry when I said should I call them, I meant should I be making him call them.

Dazed_and_confused

The Personal Allowance has gone up quite sharply in recent years so it may have been correct to pay basic rate tax a few years ago.

But your op is a bit confusing. You only get a P60 if you are employed at the end of the tax year so if he left the job in 2014 why has he got a 2015 P60.

Suggest you dig through his paperwork and be more sure of his income in each year before anyone rings HMRC. Experience on this board has shown it's better to gets things clear up front ratherwhen go in with half a story and get everyone (yourself included!) thoroughly confused.

Keep_pedalling

Dazed_and_confused wrote: »

The Personal Allowance has gone up quite sharply in recent years so it may have been correct to pay basic rate tax a few years ago.

But your op is a bit confusing. You only get a P60 if you are employed at the end of the tax year so if he left the job in 2014 why has he got a 2015 P60.

You still get a P60 with a FS pension. My main pension is with BT but at one point most of my allowance was put against a very tiny pension I have with the NHS, so something similar may have happened here.

T1m2k2

Cheers Dazed,

He worked during 2014 and then fully retired, so he had his salary and teachers pension in 2014/15 tax year. I guess that’s why he got a P60, but his tax code just says BR.

Following this he only has his teachers pension, which is £9000. He’s got tax data for subsequent years (not P60’s) and again his code is BR.

I guess my main question is, is there any taxable difference with your tax allowance if your income is from a private pension. If the answer is no then I think he needs to call HMRC ASAP.

TadleyBaggie

Sounds like he should have his full personal allowance (currently £11500) applied to his pension. Pension (private or otherwise) income is taxable in the same way as earned income, except there will be no NI deduction.

Dazed_and_confused

You still get a P60 with a FS pension. My main pension is with BT but at one point most of my allowance was put against a very tiny pension I have with the NHS, so something similar may have happened here.


Appreciate that but i had interpreted the op differently


My father is retired and has been claiming his teachers pension since 2010. He had an additional job until 2014. I’ve checked his P60 for the end of the 2015 tax year and he’s on a BR tax code.

Just shows how easily some things can be misconstrued if not crystal clear

Op, your dad can check what tax code should be being used for his pension tonight by checking his personal tax account on gov.uk.

Does he still have his P45 from the additional job he left in 2014 and if so what was his tax code on that?

xylophone

The Personal Allowance for 2015-16 was £10,600.

The Personal Allowance for 2016-17 was £11,000.

The Personal Allowance for the current tax year is £11,500.

Are you saying that in 2015/16 your father's
only income was £9000 and he paid £2000 in tax?

The P60 for his teacher's pension for 2015/16 shows a tax code of BR?

Is the code for 2016/17 also BR?

What is his situation in the current tax year?

Tom99

The BR code will be for the 2nd job there should be another code for the pension.

I think the BR code means all the 2nd income was taxed at 20% whereas there should be allowance left over because the pension is below the tax free amount. If so there should be a rebate due.

Deneb

Tom99 wrote: »

The BR code will be for the 2nd job there should be another code for the pension.

The BR code was almost certainly due to his having had two sources of income, but not necessarily for the employment income.

Up until a few months ago I had both employment income and pension income. The BR code had been allocated to my pension income by HMRC, which was fine by me, as it made no difference either way.

A couple of months prior to fully retiring earlier this year I phoned them and requested that they allocate the BR code to my employment income and my PA to my pension. All changed within a month.

I suspect what has happened in the OP's father's case is that BR was allocated to his pension income and no-one has since picked up that it is his only source of income and should be changed. A quick phone call to HMRC should sort it out. He could also log in to his Personal Tax Account first. The reason and situation may then be clearer.