Savings interest being taxed

Argonauts

Sorry for another thread on this but I’m perplexed

wife has two tax codes 441L on work pension she gets £4300 a year
sipp code 600T she’s taking out £5500
grand total £9800 nowhere near £12570
why has she not got a total of 12570 for her codes 

she has interest of £2155 reducing her code why is this on there

I am thinking ( hopefully correct ) that she can earn £12570 of pension and banks savings interest then you may get taxed
£9800 plus £2155 is £11955 nowhere near the £12570 total for your allowance 

if she does go over you have a £5000 starter savings and if gone over that a PA of a £1000 

Ringing HMRC is terrible they don’t understand what we want 

can you earn example
£9800 from pensions/Sipp   Bank interest £5000 total £14800
she will do this next year 

I explain to tax man she can only get £6000 now before tax is paid with a 600T code 
they say because of interest we reduce tax code !!

Surely they look at your account 
earned £9800 nowhere near leaves £2770 under allowance 
interest £2155 still under allowance of £12570 
then look at anything else 

or am I wrong 

HMRC “ don’t believe everything Martin Lewis says “
me “ but I’m looking at your website and it says £12570 allowance for pensions/Sipp/ bank interest “

eskbanker

What makes you think that tax will actually be charged on the savings interest (which is a process separate from PAYE tax codes)?

Argonauts

Lost me there
interest has lowered tax codes

eskbanker

But those codes are sufficient to allow her pension income not to be taxed and don't affect (non-PAYE) taxation of savings (which will be in accordance with all allowances), so there's no reason to suspect that tax will actually be paid?

Argonauts

So if we take £8000 out of sipp with a 600T code will £2000 be over tax code and get taxed 

eskbanker

Argonauts said:

So if we take £8000 out of sipp with a 600T code will £2000 be over tax code and get taxed 

If that's what you want to do then it can be reclaimed retrospectively if it results in extra tax or it should be possible to get the code adjusted proactively in advance, if the overall position for the tax year is explained clearly to HMRC.

AmityNeon

Do you have any other prior correspondence which explains the codes, such as owing tax from previous years?

Argonauts

Explained clearly
have rung twice both times they struggle to understand 
one call it did get changed to a total of 12570 with both codes then two days later got moved back to the 441L. & 600T

Argonauts

Previous year she earned £400 from work pension 
No sipp drawdown at all 

eskbanker

Argonauts said:

Explained clearly
have rung twice both times they struggle to understand

It's perhaps worth considering the possibility that your explanation wasn't as clear as you thought it was, based on an inaccurate thread title and a confused first post on here - maybe worth setting out in writing to them what the projected 2022/23 income is, and taking it from there?

Argonauts

Explained £4300 works pension only need 4400 from tax code 
rest can go to Sipp
we got 441L on works pension 
we got only 600T on sipp? Not the rest of total 
where is the rest of tax code ?

Used up by 2155 interest payments !! 

How is that ?

Explained even with that she’s under 12570 and why is code reduced when she earns under 12570