Tax change

[Deleted User]

badmemory said:

This is why I always say that your full tax allowance should always be first used against any pension payment as that is the one that will never stop even if you leave employment.  Although as Jimmo says if you were already receiving state pension the tax you are paying may well be correct.

That was always HMRC policy, or was while I worked there - grant personal allowance at continuing source. If the op left employment on code 465L and replaced this income with an occupational pension, he/she should have 465L operated on that pension. I doubt that’s happening.

drh6649

Jimmo -- yes i was receiving state pension and a full wage when i retired it was 465L and received a new code for this year  440M -- having talked to a friend who is also a pensioner his code changed to 1250 when he retired, i am receiving 2 private pensions from previous employers as well as state pension so i thought my tax code should change to the 1250 area -- pensions still taking same tax off as when i was employed -- hope this helps -- i have asked hmrc to look at this through gateway 

[Deleted User]

If your friend is receiving a state pension there is no way that his code should be 1250L which corresponds to the full personal allowance - perhaps check with him that he is a state pensioner? Looking at your current code of 440M it looks like you are claiming married allowance. The breakdown could be: personal allowance 12500 plus married allowance 1250 less state pension 9345 or so. Does this look plausible, that your state pension is c£179 per week? If so, all seems well and correct.

drh6649

hello -- checked with friend and he has deferred state pension although he has finished work

[Deleted User]

drh6649 said:

hello -- checked with friend and he has deferred state pension although he has finished work

That is why he retains his full allowances and is on a code of 1250L. There is no mechanism, and never has been, to collect tax from state pension. Accordingly HMRC will increase the amount of tax  you will pay at other sources by instructing the payer to operate a reduced code. I have outlined a calculation in my previous post. Is it far off the mark in your case.
Your friend will be similarly affected when he does draw his state pension.

drh6649

thanks purdy -- sounds right now explained as i have worked all my life and never got involved in tax reasons just paid unsure what to do -- last point should i inform my private pension providers or does the tax people