K Tax Code Help

mikeytravels2005

Just need help understanding K Tax code that my mum received.

She is 67 and took out roughly £45,000 from her work pension of which about £20k was taken as tax (to settle her mortgage). She still works and got a HMRC letter saying her tax code is now K2204. Does this mean she will earn less take home pay through her work? I'm just confused as Tax has already been paid on the £45k that she drew out?

mikeytravels2005

Sorry I forgot to add that she is also receiving state pension 

Dazed_and_C0nfused

You will never ever get to the bottom of this unless you are willing/able to provide the full details.

£45k pension taken in one go often means too much tax is deducted but not always.

To start with you need to get the breakdown of how the K2204 tax code has been calculated.

And details of what her taxable income will be this tax year (from all sources of income).

mikeytravels2005

Dazed_and_C0nfused said:

You will never ever get to the bottom of this unless you are willing/able to provide the full details.

£45k pension taken in one go often means too much tax is deducted but not always.

To start with you need to get the breakdown of how the K2204 tax code has been calculated.

And details of what her taxable income will be this tax year (from all sources of income).

Personal Allowance - £12570
Total - £12570
Less state pension - £9622
Less adjustment to rate bands - £25000 
£22052 to be added to you wages, salary or pension

This is the info I have for her

molerat

mikeytravels2005 said:

Dazed_and_C0nfused said:

You will never ever get to the bottom of this unless you are willing/able to provide the full details.

£45k pension taken in one go often means too much tax is deducted but not always.

To start with you need to get the breakdown of how the K2204 tax code has been calculated.

And details of what her taxable income will be this tax year (from all sources of income).

Personal Allowance - £12570
Total - £12570
Less state pension - £9622
Less adjustment to rate bands - £25000 
£22052 to be added to you wages, salary or pension

This is the info I have for her

And her employment income ?

Was the £45K the taxable element ?

And assume not Scotland ?

mikeytravels2005

molerat said:

mikeytravels2005 said:

Dazed_and_C0nfused said:

You will never ever get to the bottom of this unless you are willing/able to provide the full details.

£45k pension taken in one go often means too much tax is deducted but not always.

To start with you need to get the breakdown of how the K2204 tax code has been calculated.

And details of what her taxable income will be this tax year (from all sources of income).

Personal Allowance - £12570
Total - £12570
Less state pension - £9622
Less adjustment to rate bands - £25000 
£22052 to be added to you wages, salary or pension

This is the info I have for her

And her employment income ?

Was the £45K the taxable element ?

And assume not Scotland ?

Her employment income is roughly £19,000
Yes the £45k was the taxable element
Lives in England

molerat

So her annual income this year will be 19 + 45 + 10 = £74K ish which brings a tax liability for the year of around £17K

It looks like the HMRC computer has made some assumptions, added 2+2 and came out with £22052

What does her on line tax account show for expected incomes ?

She needs to contact HMRC and explain what her annual income is expected to be and get her code sorted.

And in answer to the original question a code of K2204 means she will pay £738 tax per month on her £1580 pay instead of the current £270.

mikeytravels2005

molerat said:

So her annual income this year will be 19 + 45 + 10 = £74K ish which brings a tax liability for the year of around £17K

It looks like the HMRC computer has made some assumptions, added 2+2 and came out with £22052

What does her on line tax account show for expected incomes ?

She needs to contact HMRC and explain what her annual income is expected to be and get her code sorted.

And in answer to the original question a code of K2204 means she will pay £738 tax per month on her £1580 pay instead of the current £270.

Her online tax account for expected income shows £28,000