Tax Codes 2024/25

DE_612183

Just had a look at my presonal tax account and have the following:

Job1 - Est Income £50k Tax Code 528T
Pension - Est income £9k Tax Code 998M

Which I think means that all of my tax free amount will be used on my pension, but there will be some left that doesn't get used.

Am I better off asking HMRC to reverse the tax code around?

[Deleted User]

DE_612183 said:

Just had a look at my presonal tax account and have the following:

Job1 - Est Income £50k Tax Code 528T
Pension - Est income £9k Tax Code 998M

Which I think means that all of my tax free amount will be used on my pension, but there will be some left that doesn't get used.

Am I better off asking HMRC to reverse the tax code around?

There is a logic to their approach in that the pension income is permanent. Nevertheless it is clear that just under 1000 of personal allowances will remain unused. HMRC will change this if you ask them. 

DE_612183

[Deleted User] said:

DE_612183 said:

Just had a look at my presonal tax account and have the following:

Job1 - Est Income £50k Tax Code 528T
Pension - Est income £9k Tax Code 998M

Which I think means that all of my tax free amount will be used on my pension, but there will be some left that doesn't get used.

Am I better off asking HMRC to reverse the tax code around?

There is a logic to their approach in that the pension income is permanent. Nevertheless it is clear that just under 1000 of personal allowances will remain unused. HMRC will change this if you ask them. 

Thanks - do I need to do the dreaded phone call - or is it something I can do online?

Dazed_and_C0nfused

DE_612183 said:

Just had a look at my presonal tax account and have the following:

Job1 - Est Income £50k Tax Code 528T
Pension - Est income £9k Tax Code 998M

Which I think means that all of my tax free amount will be used on my pension, but there will be some left that doesn't get used.

Am I better off asking HMRC to reverse the tax code around?

Something doesn't seem quite right there.

The M tax code relates to what HMRC consider your main PAYE source to be.  Not necessarily the highest monetary amount but often a pension, which historically would continue until you died, is classed as the main source.

Any unused tax code allowances from your main source can be allocated to any subsidiary employments or pensions but I think HMRC only give as many allowances are needed.  So if estimated earnings at the job are £50k you could have used the extra 981 - 989 allowances that aren't needed by your pension.

You could update your estimated income at each source and see if (in a day or three) that changes your codes?

Also, have you claimed some higher rate relief on RAS pension contributions?

DE_612183

Not sure - on the calculation I get this: 


I recently applied to transfer tax free allowance from my spouse so I guess that is that - not sure why they have applied the whole lot for last year and this year and then taken some off!

Dazed_and_C0nfused

DE_612183 said:

Not sure - on the calculation I get this: 


I recently applied to transfer tax free allowance from my spouse so I guess that is that - not sure why they have applied the whole lot for last year and this year and then taken some off!

I think you need to establish what the additions are but the -£1260 has confused me.

If you applied then that is you giving your spouse Marriage Allowance.

If they applied you would get extra tax code allowances.

Tax code letter M is for someone receiving Marriage Allowance but the screenshot above suggests you have applied and have £1,260 less tax code allowances.

You definitely need clarification on what has happened!