Tax on mixed income

SVaz

Say £10500 taxable pension income ( half from DB, half from Sipp) and £7000 profit from self employment with a £13800 personal allowance.
Is it simply 20% of £3700 ? 

I’m thinking of going very part time next year and wondered how it is all taxed - will my pension income be taxed at source or will It be paid gross then I add the income to my self assessment ?  

Dazed_and_C0nfused

You cannot have a Personal Allowance greater than £12,570.

Assuming you are receiving Marriage Allowance then your income tax liability would be,

£17,500 less £12,570 Personal Allowance = £4,930 to be taxed.

£4,930 x 20% = £986
Less Marriage Allowance credit £252

Tax payable = £734

You can choose re the pension income, you can pay nothing during the year (on £10,500) or you can ask to (provisionally) pay something by having a lower tax code.

But the final position will be determined from your tax return.

NB.  The above assumes you aren't Scottish resident for tax purposes.

SVaz

Yes I meant the tax code rather than PA.  

So my basic assumption on tax was right,  good to know.  

Just realised I’ll be able to request a lower payment on account come January 2026 if I do drop some work too.  

It all depends on how much I can shove into mine and my Wife’s Sipps over the next 20 months.   

[Deleted User]

Payments on account would not apply if your tax liability for the previous year is less than £1000. 

SVaz

I’ll have a tax bill of £3k ish for this year plus £1500 x 2 payments on account - it’s my first year in profit.