Why no tax code

Auntiemisty

Both my husband and I are over 70 and our pensions our only income.  My husband was self employed and I was PAYE.  However neither of us have been sent a tax code for many years and in view of the recent increase in pensions may well be liable to pay tax.  Is it usual to not hear from the tax office in our situation?  Not sure what to do.

Dazed_and_C0nfused

Who pays these pensions?

Albermarle

Also are you both getting state pensions?

molerat

A tax code is only a way of deducting the correct amount of tax from a PAYE income stream.  If you do not have one then you will not have a tax code but you could still be liable to tax or possibly need to complete self assessment.  You will still have a tax allowance though.

xylophone

Do either or both of you have non savings income in excess of your personal allowance?

What is the situation in respect of savings/dividend income outside tax privileged accounts (eg ISAs)?

https://www.litrg.org.uk/tax-guides/tax-basics

p00hsticks

Auntiemisty said:

Is it usual to not hear from the tax office in our situation?  

Yes, it is usual.
My understanding is that HMRC no longer notify individuals of their tax code unless it deviates from the standard 1257L in some way.
You can always verify what yours is online via your personal tax account
Personal tax account: sign in or set up - GOV.UK (www.gov.uk)

If you have no income other than your (taxable but not taxed at source) state pension with which to use that tax code against then if you do end up owing tax I believe you'll get a letter from HMRC at the end of the tax year giving you options on how to pay. 

squirrelpie

p00hsticks said:

Auntiemisty said:

Is it usual to not hear from the tax office in our situation?  

Yes, it is usual.
My understanding is that HMRC no longer notify individuals of their tax code unless it deviates from the standard 1257L in some way.

If you have a state pension plus any private pension then you will have a tax code that is not 1257L for the private pension. That will change each year as the pensions are adjusted.

If you only have the new state pension then it is not yet enough by itself to exceed the personal allowance so there'll be no tax due and no need for a tax code. I don't know enough about the old state pension to know whether it is possible for that to exceed the personal allowance?

xylophone

A person on new state pension could be receiving both full NSP and a "protected payment".

A person on old state pension could be receiving full basic state pension and additional state pension.

It would certainly be possible in either case to be in receipt of more than £12,570  per annum in SP.

https://www.which.co.uk/money/pensions-and-retirement/state-pension/your-state-pension-and-benefits/state-second-pension-and-serps-aBlEx9M8XXWY

molerat

squirrelpie said:

p00hsticks said:

Auntiemisty said:

Is it usual to not hear from the tax office in our situation?  

Yes, it is usual.
My understanding is that HMRC no longer notify individuals of their tax code unless it deviates from the standard 1257L in some way.

If you have a state pension plus any private pension then you will have a tax code that is not 1257L for the private pension. That will change each year as the pensions are adjusted.

If you only have the new state pension then it is not yet enough by itself to exceed the personal allowance so there'll be no tax due and no need for a tax code. I don't know enough about the old state pension to know whether it is possible for that to exceed the personal allowance?

The old state pension can be as much as £18764 at 2023 rate

Marcon

Auntiemisty said:

Both my husband and I are over 70 and our pensions our only income.  My husband was self employed and I was PAYE.  However neither of us have been sent a tax code for many years and in view of the recent increase in pensions may well be liable to pay tax.  Is it usual to not hear from the tax office in our situation?  Not sure what to do.

You don't need to do anything. If you and/or your husband have any non-state pensions, then the provider will be reporting the amounts to HMRC, who also have a record of the amount of state pension for each of you. If any tax is due, they'll contact you by letter.