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Dazed_and_confused wrote: »
You have to have income of at least £16,850 before you can benefit from the Personal Savings Allowance (really a 0% tax rate). ...
Yes but the savings starter rate of tax comes in between them. That allows upto £5,000 of interest to be taxed at 0%. The savings nil rate (known as the Personal Savings Allowance) only applies after the Personal Allowance and savings starter rate band have been used up.
Using 2017:18 figures as an estimate for 2018:19 is quite normal. And it also quite normal to show the interest income in your tax code if you are not going to pay tax on the pension or employment income the tax code relates to.
I think you're concern is probably unfounded. Does the tax code applied to either the original or new LGPS pension mean you will be paying tax on either pension?
Malchester wrote: »
Oh the intricacies of HMRC. My earned / DB pension income this tax year is less than my personal allowance. I also have interest greater than £1000. Should not pay tax. Hmrc changed my tax code to gather tax from interest over £1k even though should not pay it. First person I spoke to denied there was such a thing as the £5000 starter allowance. Next person sorted it out but only by fiddling with tax code. He said the system could not cope with those whose income is less than personal allowance but interest is greater than £1k. He said ring back after 4 Feb when they should have it sorted. Have left it and will ring back next week
Dazed_and_confused wrote: »
Are you able to tell us if the tax codes you believed to be wrong would have actually resulted in tax being deducted from your earnings or pensions.
I am not convinced your tax codes were actually wrong in the first place or that the second HMRC person understood how their own tax code system works. Or that there is anything to sort out.
2010 wrote: »
I only logged in to my PTA yesterday to see what was there as I received a letter saying I owe tax on savings.
In the tax year 18/19 which has not ended yet all my savings and interest are listed from the previous tax year.
I would have thought that this info should have been in tax year 17/18, which shows no savings accounts at all.
I would have thought that this tax year would remain blank until the banks and B/Soc forward the info in August.
Anyway, some of the account are now closed but when I tried to remove them I got the "tech problems try again later".
The only two I did manage to alter were at Virgin money and then it said it would take three weeks to change.
I know the system is only beta but hopefully it might improve over time so that you can actually make amendments.
colsten wrote: »
It's how it's supposed to work - they assume you continue to get your previous year's interest. If you know you won't, just call them and tell them. They can adjust your tax code. They've done this for me.
Do you mean I have to have pension (or earnings) over £16,850 to benefit from the £1000 PSA nil rate or the £5000 Savings Starter Rate (nil rate) please?
However, if they calculate in the same way for 19-20, when my combined pension income will exceed the personal allowance and I will be receiving higher interest returns, such a reduction calculated in the same way i.e. taken off my tax free PA is going to affect my tax code and result in me paying unnecessary tax that I need to act upon.
You seem to be indicating that I should allow the deduction from my PA taking it below the threshold and then reclaim later.
All I have read on here and HMRC indicates that everyone can earn up to £1000 in earned savings interest at the 0% rate.
If I am the second person you refer to, I do understand the tax code system to some extent.
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