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Personal allce
Silverbird65
Posts: 451 Forumite
in Cutting tax
So confused can someone explain as an OAP I have £8632 OAP £1200 company pension. Plus £3200 savings interest will I pay tax. I don't understand low income thing. Please explain.
Cheers
Cheers
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Comments
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How much of that interest payment comes from ISAs?0
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None. I already have Isa. Mum sadly died and had inheritance.
Thanks0 -
Assuming that your tax codes is 1250L, you will have no tax to pay. Your taxable income is £9832. As this is below your personal allowance of £12,500 you also benefit from the starter savings rate of £5,000 @ 0% - your savings interest will be covered by this. You could receive an additional £1,000 personal savings allowance, also at 0%.
#2 Saving for Christmas 2024 - £1 a day challenge. £325 of £3661 -
My tax code is split between pension and so but they seemed to bring in savings as income .
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The savings interest is taxable income but at 0%. A quirk in the system means that if you have an income below your allowance they deduct savings interest to fill the gap, presumably reducing the possibility of getting a bill at the end of the year. It does not affect how much tax you actually pay and as long as the tax code allocated to the company pension is 120 or above all should be ok.
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It is this tax yr but obviously it may go up a bit next year. Do I call to change code if necessary?
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From experience they have a 50/50 chance of getting it right. If you have an on line tax account you can change the estimated income amount just before the start of the new year otherwise a phone call if they don't get it right. If the code is suffixed with L then they should just add the full amount of the annual tax code increase to it next year.Silverbird65 said:It is this tax yr but obviously it may go up a bit next year. Do I call to change code if necessary?
Cheers
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Thank you it is so confusing. I was a tax officer back in the 70s things have changed
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If you're not due to pay tax why do they presume you will? IAM totally confused. Do I tell them every year my interest from savings?
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What tax code has been allocated to your company pension?
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