40% Emergency tax code

buyhighselllow

I retired at the end of July and started getting my NHS pension in August. After a short while the tax code on my pension was corrected by HMRC who informed NHS pensions and the same code was applied as when I had been at work.

I started work on the NHS bank in September and have finally been paid for 8 shifts. Not only have they deducted pension contributions ( which I never wanted them to do) , they have also applied an emergency tax code but at 40%.

When I had permanent contract I never paid tax at 40% ( as towards the end I reduced hours and the 11.5% pension contribution's just kept me below the threshold). So, with only four paychecks to my name up til August this financial year, and a 3 monthly pension payments since well below my previous salary, why am I being taxed at 40% on my Bank earnings ? I should say the hourly rate is decent and if I were to work 3  days a week for a year I would be paying 40% as a stand alone salary, but I am only working 2 days on an ad hoc basis. I think the code they have used is "OT non accumulative".

So, how are these issues usually resolved, going forwards I am potentially £400-500 worse off for each 8 shifts per month.

thanks

Dazed_and_C0nfused

D0 is the 40% tax code.

0T is often a temporary code used when an employee (or employer) hasn't complied with the new starter process i.e. no P45 to hand in and no new starter declaration completed.

0T doesn't give any tax allowances but goes through the 20%, 40% and 45% rate bands.

Did you complete a new starter declaration?  If so you should be on tax code BR (basic rate, 20%).

Anyway if you contact HMRC they should be able to issue a revised code, probably BR, and if you ask for that to be issued on a cumulative basis your employer will refund any excess tax the first time they use the new code.

buyhighselllow

Dazed_and_C0nfused said:

D0 is the 40% tax code.

0T is often a temporary code used when an employee (or employer) hasn't complied with the new starter process i.e. no P45 to hand in and no new starter declaration completed.

0T doesn't give any tax allowances but goes through the 20%, 40% and 45% rate bands.

Did you complete a new starter declaration?  If so you should be on tax code BR (basic rate, 20%).

Anyway if you contact HMRC they should be able to issue a revised code, probably BR, and if you ask for that to be issued on a cumulative basis your employer will refund any excess tax the first time they use the new code.

That seems Odd , Its the same organisation I worked for prior to retirement , same payroll/ HR etc who sent my P45 when I retired and I also received full confirmation of Bank status and a new assignment number before I started working again

[Deleted User]

buyhighselllow said:

Dazed_and_C0nfused said:

D0 is the 40% tax code.

0T is often a temporary code used when an employee (or employer) hasn't complied with the new starter process i.e. no P45 to hand in and no new starter declaration completed.

0T doesn't give any tax allowances but goes through the 20%, 40% and 45% rate bands.

Did you complete a new starter declaration?  If so you should be on tax code BR (basic rate, 20%).

Anyway if you contact HMRC they should be able to issue a revised code, probably BR, and if you ask for that to be issued on a cumulative basis your employer will refund any excess tax the first time they use the new code.

That seems Odd , Its the same organisation I worked for prior to retirement , same payroll/ HR etc who sent my P45 when I retired and I also received full confirmation of Bank status and a new assignment number before I started working again

On the NHS pension front - check that you have completed the necessary forms to leave the scheme. Many forget to do this! Also ensure that your employer knows this as they will opt you in unless notified.

macy08

As your Bank Post is a technically a new employment it will have been auto enrolled into a qualifying pension scheme.  This is a legal requirement but you are free to opt out should you wish to do so, and if done within one month of being auto enrolled they should refund any contributions you have paid to date.  Please also note, just because it is the same employer they cannot automatically apply your tax code and figures from your P45.  You would need to give it back to them for them to use the details contained within. Each pay period they would have sent a file to HMRC notifying them of your new post.  At some point HMRC will send them back a revised tax code, if it is a cumulative code you will likely receive  a tax refund in the next pay period. To help speed this along you may wish to give HMRC a call.  The payroll department have applied tax and auto enrollment rules correctly.

Dazed_and_C0nfused

macy08 said:

As your Bank Post is a technically a new employment it will have been auto enrolled into a qualifying pension scheme.  This is a legal requirement but you are free to opt out should you wish to do so, and if done within one month of being auto enrolled they should refund any contributions you have paid to date.  Please also note, just because it is the same employer they cannot automatically apply your tax code and figures from your P45.  You would need to give it back to them for them to use the details contained within. Each pay period they would have sent a file to HMRC notifying them of your new post.  At some point HMRC will send them back a revised tax code, if it is a cumulative code you will likely receive  a tax refund in the next pay period. To help speed this along you may wish to give HMRC a call.  The payroll department have applied tax and auto enrollment rules correctly.

That may well be true but providing the op with a new starter declaration form would have been helpful (assuming they didn't).

buyhighselllow

Dazed_and_C0nfused said:

macy08 said:

As your Bank Post is a technically a new employment it will have been auto enrolled into a qualifying pension scheme.  This is a legal requirement but you are free to opt out should you wish to do so, and if done within one month of being auto enrolled they should refund any contributions you have paid to date.  Please also note, just because it is the same employer they cannot automatically apply your tax code and figures from your P45.  You would need to give it back to them for them to use the details contained within. Each pay period they would have sent a file to HMRC notifying them of your new post.  At some point HMRC will send them back a revised tax code, if it is a cumulative code you will likely receive  a tax refund in the next pay period. To help speed this along you may wish to give HMRC a call.  The payroll department have applied tax and auto enrollment rules correctly.

That may well be true but providing the op with a new starter declaration form would have been helpful (assuming they didn't).

so, looking into this further, an SD502 and a RF12 form to payroll should possibly resolve the pension issue ?

greatkingrat

Why do you want to say no to free money from your employer?

Dazed_and_C0nfused

greatkingrat said:

Why do you want to say no to free money from your employer?

Some people are a bit odd when it comes to pensions, happy to take what is basically quite a large pay cut!

badmemory

It is possible if the NHS haven't terminated your original employment properly so that HMRC think you still have the original job too.  If the pension is different from the original scheme then why not pay into it, why take a paycut by not accepting their contribution.

buyhighselllow

So I have had notification from HMRC that the tax code is now BRx so maybe I will get refunded via the employer

I am sticking with the pension payments