On Line Tax Accounts Now Showing 24-25 Tax Coding

molerat

For me anyway.   Trying to work out how they think my PS pension will pay less than last this year

subjecttocontract

It's not a leap year.

Dazed_and_C0nfused

molerat said:

For me anyway.   Trying to work out how they think my PS pension will pay less than last year

Because it will have been based on the income details to December 2023 or January 2024, see CY+1 Annual coding estimated pay section here.

https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye13090

Or do you mean 2022-23?

RG2015

My 24/25 tax code is also now showing and my company pension is projected to be the same as the 12 months to Jan 2024.

They have also included the 8.5% state pension increase from April 2024.

molerat

Sister in law now has a £175 negative tax free amount, full new state pension and gives her 10% away. A lot of people are going to see this.

MrsM is showing a dividend tax amount, probably about correct. Again I suspect a lot of people are gong to be hit with this one now with the allowance down to £500.   Do dividends get reported in a similar way to savings interest ?

molerat

Dazed_and_C0nfused said:

molerat said:

For me anyway.   Trying to work out how they think my PS pension will pay less than last year

Because it will have been based on the income details to December 2023 or January 2024, see CY+1 Annual coding estimated pay section here.

https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye13090

Or do you mean 2022-23?

Meant this year

From the manual It works out that as the April payment is lower due to it being at part last part this year rates that brings the average income down.  My other pension which has 12 equal payments shows same as this year.

They have also just made a seemingly random guess for my SIPP contributions based on last year's adjustment which only used the amount needed to keep me out of the next band instead referring to the full amount.

[Deleted User]

That random guess is all HMRC has to go on. It is simply an attempt to have tax deducted under PAYE be as accurate as possible. 

molerat

[Deleted User] said:

That random guess is all HMRC has to go on. It is simply an attempt to have tax deducted under PAYE be as accurate as possible. 

Last year I gave them the full amount of my contribution but they only used the amount needed.  They could have used the information I gave them last year and then again used the amount needed instead of the incorrect random guess, would have saved the need for a phone call.

Dazed_and_C0nfused

molerat said:

[Deleted User] said:

That random guess is all HMRC has to go on. It is simply an attempt to have tax deducted under PAYE be as accurate as possible. 

Last year I gave them the full amount of my contribution but they only used the amount needed.  They could have used the information I gave them last year and then again used the amount needed instead of the incorrect random guess, would have saved the need for a phone call.

It isn't a random guess though, it will be an adjustment to allow the higher (or intermediate) rate relief due on those RAS contributions and that won't necessarily have any obvious relationship to the amount of the contribution.

For example they might have assumed the same gross contribution but with the new estimates of your earnings/pension income for 2024-25 the adjustment required will be bespoke to those figures.  If you know all the elements of your tax code calculation and the estimates of each employment or (non State) pension you could work it out.  But that underlying data is needed.

jimmo

molerat said:

For me anyway.   Trying to work out how they think my PS pension will pay less than last this year

FWIW I have 2 PS pensions and HMRC's figures suggest:
PS pension 1 will increase by 8.0%
PS pension 2 will increase by 9.3%
State pe4nsion will increase by 10.8%.
Tax deducted will increase by 14.3%.

At this stage and in my circumstances the State pension figure is the only important one and I am comfortable just waiting until I get the DWP notification in February.

SiliconChip

jimmo said:

molerat said:

For me anyway.   Trying to work out how they think my PS pension will pay less than last this year

FWIW I have 2 PS pensions and HMRC's figures suggest:
PS pension 1 will increase by 8.0%
PS pension 2 will increase by 9.3%
State pe4nsion will increase by 10.8%.
Tax deducted will increase by 14.3%.

At this stage and in my circumstances the State pension figure is the only important one and I am comfortable just waiting until I get the DWP notification in February.

Interesting. I have 2 DB pensions and HMRC have estimate one at the same figure next year as this year and the other, bizarrely,  at £35 lower than this year. I would expect both to actually increase by something in the region of 5%, or perhaps even a little more, so I've no idea what HMRC have used to arrive at their figures.

I hit 66 in November and qualify for State Pension but I presume they won't reissue tax codes to take that into account until I actually claim it (which I intend to do as soon as I can, but they won't know that until it happens).

One thing I have seen is that their estimates for untaxed interest are massively below what the real figures will be - for 2023-24 they've estimated £593, but it will be something in the region of £5,800, is it worth updating the figure now so that my tax codes take that into account before they come into effect in April or is it better to just wait until they have the figures submitted by the financial institutions and they issue updated codes later in the year, with any tax due being collected in the remaining months before April 2025?