Carers allowance and earnings / tax

Kay_co

I claim carers allowance and have recently started very part time work. My net earnings after tax and pension deductions puts me below the earnings threshold. Without tax I will be above the threshold and lose my carers allowance. 

I have an occupational pension. Majority of my tax code allowance is set against my pension so I don’t pay tax on my pension. My concern is that at some point Hmrc will change where my tax allowance is set meaning I pay tax on my pension rather than my earnings, removing my entitlement to carers allowance. Has anyone else experienced this. Can I tell HMRC which income I want my tax code set against. Thanks 

Robbie64

I believe it's earnings before tax for wages  from work (with allowable deductions) that matter. However, it doesn't matter if you pay tax as a result of your earnings if you also have another source of taxable income. As long as you stay below the earnings threshold for CA then you will be fine.

kaMelo

Be aware your earnings are reduced by only 50% of your pension contributions, you can't deduct all of them.

I can't answer your question about allocating more of your personal allowance towards your employed income.

sheramber

kaMelo said:

Be aware your earnings are reduced by only 50% of your pension contributions, you can't deduct all of them.

I can't answer your question about allocating more of your personal allowance towards your employed income.

The OP does not make Occupational Pension payments. They recieve an Ocuupational oension whixh  does not count as earnings for Carers Allowance.

sheramber

Robbie64 said:

I believe it's earnings before tax for wages  from work (with allowable deductions) that matter. However, it doesn't matter if you pay tax as a result of your earnings if you also have another source of taxable income. As long as you stay below the earnings threshold for CA then you will be fine.

It is earnings after tax and NIC and allowable expenses.

https://www.gov.uk/carers-allowance/eligibility

• your earnings are £151 or less a week after tax, National Insurance and expenses

sheramber

As the pension is the ongoing income it is normal for HMRC to allocate that as the main source of income and set the personal allowance against it.

Yes, you can ask HMRC to allocate your personal allowance where you want.

kaMelo

sheramber said:

kaMelo said:

Be aware your earnings are reduced by only 50% of your pension contributions, you can't deduct all of them.

I can't answer your question about allocating more of your personal allowance towards your employed income.

The OP does not make Occupational Pension payments. They recieve an Ocuupational oension whixh  does not count as earnings for Carers Allowance.

From the opening post;

Kay_co said:

I claim carers allowance and have recently started very part time work. My net earnings after tax and pension deductions puts me below the earnings threshold. Without tax I will be above the threshold and lose my carers allowance. 

I'm aware the OP receives an occupational pension which does not count towards the earnings threshold, however my reading of the opening post is that they are also contributing to an occupational pension from their employed earnings which is helping keep them under the earnings threshold. I was just pointing out that whilst pension contributions are an allowable expense, they can only expense 50% of their pension contributions.

Kay_co

sheramber said:

As the pension is the ongoing income it is normal for HMRC to allocate that as the main source of income and set the personal allowance against it.

Yes, you can ask HMRC to allocate your personal allowance where you want.

Thank you very much. That was what I wanted to know.