When will HMRC adjust my code to reflect my pension contribution?

MetaPhysical

I am making a large pension contribution of £15k to get my NAI below 100k.  I have just made the contribution however, HMRC do not know about this yet and I got a K code through the post last week since HMRC clearly think I will gross £115k and they know nothing about this pension contribution just yet.

I do not get my P11D until June and so do I assume that when I have done my TR and declared this large pension contribution HMRC will automatically correct my tax code?  I know this will all sort itself out on the 2024-2025 TR but that is over a year away and I would rather not be paying more tax on a monthly basis that could be going into my pension!

What does the "provisional" column mean on the TR pages online?  Could I use this until I do get my P11D and then correct the return at that time?  By doing that the tax code will update immediately with the provisional figures?

BoGoF

When are you making this payment? This tax year or next? As you are talking about a P11d due in June I assume this tax year 23/24

They won't know about the pension contribution until you tell them, either by phone or writing now - or waiting till you submit your 23/24 Tax Return. It is getting rather late in the current tax year for a code to be issued and operated before the year end so the Tax Return option may be the only one open to you.

MetaPhysical

I've made the 15k payment for this tax year.  It has already gone into the pension pot.  So when I do my TR when it opens after April 6th for this tax year's numbers I will put down this 15k payment.  That should then reset the Tax code because HMRC will then know about the 15k pension contribution.  However, I don't get my p11D until June so I can't formalise the TR until them.  That means 3 months of paying tax on a K code which will not be valid.  I know I will get the tax refunded but best if I don't pay it in the first place.  I suppose ringing them is the best course of action - if they ever answer!

BoGoF

So the K code is for 24/25? Unless your income has gone down or you are making a similar pension payment next year then the payment you have just made has no bearing on 24/25

MetaPhysical

BoGoF said:

So the K code is for 24/25? Unless your income has gone down or you are making a similar pension payment next year then the payment you have just made has no bearing on 24/25

It does.  HMRC set the code for the *new* tax year assuming you will repeat *this* year and to reclaim tax that you owe.  But I do not *owe* the tax because I made that pension contribution last thing in the 23/24 tax year which will give me my personal allowance back (which led to the K tax code).

BoGoF

Yes "assuming" you repeat it - are you repeating it though?

MetaPhysical

BoGoF said:

Yes "assuming" you repeat it - are you repeating it though?

No.  I won't be.  I am starting to work part time to avoid the 60% tax trap.  I am not working for the government's benefit.

BoGoF

So it's your estimated income you want to adjust for 24/25 which you can do via your personal tax account.

If you get the benefit of 'assumed' pension contributions in next years code and don't pay any you will be underpaid.

Dazed_and_C0nfused

MetaPhysical said:

I am making a large pension contribution of £15k to get my NAI below 100k.  I have just made the contribution however, HMRC do not know about this yet and I got a K code through the post last week since HMRC clearly think I will gross £115k and they know nothing about this pension contribution just yet.

I do not get my P11D until June and so do I assume that when I have done my TR and declared this large pension contribution HMRC will automatically correct my tax code?  I know this will all sort itself out on the 2024-2025 TR but that is over a year away and I would rather not be paying more tax on a monthly basis that could be going into my pension!

What does the "provisional" column mean on the TR pages online?  Could I use this until I do get my P11D and then correct the return at that time?  By doing that the tax code will update immediately with the provisional figures?

They won't do now, you've missed the boat for that.

Any relief due for 2023-24 will be dealt with via your 2023-24 Self Assessment return, not by an adjustment to your tax code.

None of this has any relevance to your 2024-25 Self Assessment return.

You can file a provisional return using estimated benefit in kind details but that still won't mean you benefit from any tax code change to give you tax relief for a 2023-24 pension contribution. 

The relief due for 2023-24 will be reflected on your 2023-24 Self Assessment calculation and result in a smaller bill or a refund.

sheramber

Is the K code  you are referring to for 24/25 and because HMRC assume you will earn over £100k in 25/25?

You can adjust your expected income for 24/25 in your personal tax account , online. 

MetaPhysical

sheramber said:

Is the K code  you are referring to for 24/25 and because HMRC assume you will earn over £100k in 25/25?

You can adjust your expected income for 24/25 in your personal tax account , online. 

Yes.
I didn't know you could do that, I shall investigate.  Thankyou.