Pension/Part time worker/Income tax

jewelpoppet

Hello,
I receive state pension and work about 20hrs on minimum wage and earn £206.57 per week.
I pay £33.60 p.w. tax and it niggles me as it feels like I work almost 3.5 hours for nothing (which I do)!
Can anyone advise how much a WEEK I can earn without paying income tax please ... if I were to drop three hours a week, would that take me under the tax threshold?

JGB1955

How much do you receive in State Pension each year?  Deduct that from your personal allowance (lets say that's £12,570 for simplicity) and you will have to pay tax on any excess.  Looks like your weekly income is somewhere in the region of £400.  You need to reduce it to £241 (including the pension).  It makes NO sense to try and avoid paying tax - 80% of something is a lot better than 0%.  

Dazed_and_C0nfused

JGB1955 said:

How much do you receive in State Pension each year?  Deduct that from your personal allowance (lets say that's £12,570 for simplicity) and you will have to pay tax on any excess.  Looks like your weekly income is somewhere in the region of £400.  You need to reduce it to £241 (including the pension).  It makes NO sense to try and avoid paying tax - 80% of something is a lot better than 0%.  

Rubbish!

The op will have a warm glow from avoiding paying any tax.

Which will be handy as they may no longer be able to afford any heating 😳

xylophone

You have the standard Personal Allowance of £12,570?

SP and salary your only taxable income?

SP under PA?

Deduct SP from PA - the balance is what you can earn tax free.

amanda1024

jewelpoppet said:

it feels like I work almost 3.5 hours for nothing (which I do)!

That's not necessarily a helpful way to think about it. Instead - for only £33.60 a week you get to benefit from healthcare, police, defence, infrastructure (e.g. streetlights, flood defences), museums, and more - as well as a welfare safety net if you need it. That's pretty good value (it costs some of us a lot more - and we don't get any extra out!)

Marcon

jewelpoppet said:

Hello,
I receive state pension and work about 20hrs on minimum wage and earn £206.57 per week.
I pay £33.60 p.w. tax and it niggles me as it feels like I work almost 3.5 hours for nothing (which I do)!
Can anyone advise how much a WEEK I can earn without paying income tax please ... if I were to drop three hours a week, would that take me under the tax threshold?

Have you asked to join your employer's auto-enrolment pension scheme? You are over SPA so they don't have to enrol you automatically, but they must enrol you and pay contributions if you:

• earn over £10,000 a year [you do, providing you don't drop your hours to try and avoid tax]
• and are aged between 16 and 21 or between State Pension age and 74 [don't know how far over SPA you are]

You'd have to pay contributions too - but you'd get tax relief on them. This would be added to your 'pension pot' assuming your employer offers a 'relief at source' type of pension; or it would be deduced from your gross pay before tax is applied if it is something called a 'net pay' scheme. Your employer could confirm.

Phossy

£38.57 is what you can earn per week without paying tax.

As you are paying £33.60 per week in tax, that means your taxable portion is £33.60 / 20% = £168.
Take that £168 from £206.57 and you get £38.57. 

If it were me, I'd be happy to pay tax and take much more home.