STARTING RATE

plugged1

Hi I have noticed that HMRC have reduced my tax code to 994
I receive a work pension of £7374.00, I have transferred 10%of my PA to my husband, (I've deleted this for 2024/25) I received £1364.00 interest on savings making my PA now 994
I have recently been given carers allowance of £76.75 per week, increasing to £81.90pw in April.
with the reduced tax code the employment pension and carers allowance will exceed my PA.
I thought I would receive the pension and carers allowance and interest and only exceed what I thought my new PA of 1256 by a small amount.
Im confused can anyone help/explain.i hope I've explained it clearly enough

Dazed_and_C0nfused

Have you notified HMRC of the Carers Allowance, I presume not?

Once you do that will use up your Personal Allowance first, then your works pension and your interest will no longer be included in your tax code as it drops into the savings strategy rate band.

NB.  At the moment the interest is in your code as you have spare Personal Allowance, which you won't have when Carers Allowance is taken into account.

Bigwheels1111

I called HMRC last year, ready for this year as having not earned anything my code was wrong.
Found out that carers allowance had not told HMRC for 4 years that it is paid to me.

plugged1

Thank you for your help, I will contact HMRC and advise them that I'm receiving carers allowance, I assumed that it would be done automatically by DWP. Hopefully this will solve everything.
Thanks again.

Qyburn

You can update your expected earnings online, they do some sort of validation then if appropriate they adjust your tax code(s).