Tax on pension

Albermarle

It could be that the tax taken from the pension at source is included in the calculation . The pension company will have paid the tax to HMRC .
In otherwords the total tax you have paid includes tax paid on salary + the tax taken from the pension?

Dazed_and_confused

Or it could be that the main tax code is reduced to account for the small pension and the small pension is having basic rate tax deducted?

Until the op tells us how her main tax code is calculated it's all guess work.

xylophone

What is shown as the tax code on your latest salary statement?

SonOf

Tax code on pension says BR

That means the pension income is being charged basic rate tax. So, only being taxed once. Not twice.

It also suggests that your tax code is being applied to another income. Normally, it is applied to your largest income source. What you have written suggests it is the employment income.

A tax code summary is not an additional tax. It is an explanation of the total tax you are paying.

Dazed_and_confused

You really cannot say without any certainty that it is being taxed once not twice.

The op's main tax code might be something like this

Personal Allowance £12,500
Less Occupational Pension £991
Net tax code allowances £11,509
Tax code 1150L

If the tax code adjustment related to the same pension which has the basic rate tax code then the op is being taxed twice on the small pension.

Until the op tells us the make up of their main tax code it is all guess work.

JBO

hi, my current tax code is 1245L

ive looked online at HMRC and it shows there is a £50 taxable expenses benefit taken off my personal allowance relating to my employer.
it also shows the small pension from my late husbands pension of £902 for the year with tax code BR.

Ive found a letter from HMRC dated 17th Feb saying that the Government from 2014 are introducing a new personalised Annual Tax Summary and it says my full personal allowance has been allocated to my employment and the basic tax rate of 20% is deducted from my pension.

im really confused but it does look like the pension provider takes off tax and then i get taxed again by hmrc? Is that right?

Dazed_and_confused

im really confused but it does look like the pension provider takes off tax and then i get taxed again by hmrc? Is that right?

Could you please explain in as simple terms as possible why you think you are being taxed twice?

You have told us that the small pension is having basic rate tax deducted but have failed to tell us how exactly it is being taxed the second time? Where are you losing the extra tax from?

JBO

the P60 for the pension shows they definately tax me at source - tax of 180.40 for the year with tax code BR, leaving the £902 above

JBO

ok - its being taxed by pension provider before i get it, (180.40 in 12 months)
then the remainder is being classed as income by HMRC and being taxed at 20%.

i know its a small amount but it means a lot as it relates to my late husband.

Dazed_and_confused

So when are you paying an extra £180.40?

Paying as in getting your cheque book out and paying it over to HMRC or having it deducted by paying extra tax on another source of income.