Personal allce

Silverbird65

It's just a little pension to cover contracted out time. 120 is the code but if it goes up next year a bit will I have to get them to give me more allce to cover because they are taking into acct my interest in allce. Very confused if I am meant to have 5000 +1000 tax free interest. Why is it so complicated😄

molerat

As I said before, you may or may not have to do something about the tax code next year.  All you can do is wait and see and the easiest way to get it changed if necessary is via your on line tax account.

Silverbird65

120 which covers this year's pension.
😆

Silverbird65

The on line tax acct doesn't let you do most things it's not great ☺️.

molerat

Silverbird65 said:

The on line tax acct doesn't let you do most things it's not great ☺️.

It lets you input what income you expect to receive from whatever sources which, if incorrect, can have the wrong tax code applied to it.

Silverbird65

TBH I just ring them every year with my interest details from previous year so they usefigure to estimate current year . A faff but that's ok because when I try to input figures it seems to go wrong.  

polymaff

Yes, the income tax system is more complicated than it was 50 years ago. Your total income is so low, however, that you have no liability to tax - nor will have for the forseeable future.

I take it that you are worried about the PAYE coding of your non-state pension.  If that is currently £1,200 and the PAYE coding is 120, that is spot-on.  I take it that that pension has risen over the years, so if the PAYE coding has tracked the pension correctly in the past, why worry that it might not in the future?

As for the state pension, HMRC work directly with DWP to get that right. Again, if this has been working, it'll likely keep working.

After your pensions are dealt with you have, and will likely always have Personal Allowance left over.  In this circumstance the newer features of Income Tax on Taxable Savings income, (and they're not that new) work TOTALLY favourably  in your particular circumstance in that you can have taxable savings income of up to £6,000 plus the surplus Personal Allowance and not be due to pay one penny of income tax.  Will it work? Well has it been working so far?

HMRC claim that they get all that they need to know about your taxable savings income from the savings organisations. Does this work?  There is no concensus on this on MSE, and, anyway, it is still your duty to declare all taxable income to HMRC, but you sound like you are already doing this.  It is only when your taxable savings income reaches £10,000 that you have to enter self-assessment.

Silverbird65

Thank you for taking the time to answer my questions that helped. The bad news is hubby lost his job due to Covid 19. He is 63 not much around job wise but we must complain many people are suffering loss in greater ways i.e. human loss.  We just wish everyone a hopefully better summer.
Thanks again.

polymaff

mustn't!  Yes, there are plenty losing far more than their livelihood.

badmemory

I think one of the things we always have to remember here is that it is OUR responsibility to get our tax right, not HMRCs or DWPs. 

Unfortunately DWP do not seem to be able to tell HMRC the correct state pension figure, they get it right about 1 year in 4 due to the date of the first payment of the increased rate.  As for HMRCs figure for interest, so far nowhere near right & I only have interest from major banks!  I actually find it harder to check their figures than I did to file self assessment, but they won't let me do that anymore.