HMRC totally confused me today

Tooyoungtoretire59

I called HMRC today as my tax code notice seems wrong, although they say its correct.  Can someone have a quick look as Im not confident - the original last tax code notice I received a couple of months ago was incorrect and this is their new one they have sent me but it still looks wrong.

This is my tax code notice:

Personal allowance £12570

Less untaxed interest £1959 (- savings interest £3000)

My workplace £5583 of this income is tax free (- my salary for the year will be £8000)

My pension 4969 of this income is tax free (- my pension for the year will be £3400 - and in previous tax years it has never been more than this)

TOTAL TAX FREE AMOUNT £10611

Do my tax free amounts look right?  

I did withdraw all money from another pension this year as a one off payment (which i had never touched before). but the lump sum I received was net - after tax deductions so wouldn’t count I assume

Dazed_and_C0nfused

Tooyoungtoretire59 said:

I called HMRC today as my tax code notice seems wrong, although they say its correct.  Can someone have a quick look as Im not confident - the original last tax code notice I received a couple of months ago was incorrect and this is their new one they have sent me but it still looks wrong.

This is my tax code notice:

Personal allowance £12570

Less untaxed interest £1959 (- savings interest £3000)

My workplace £5583 of this income is tax free (- my salary for the year will be £8000)

My pension 4969 of this income is tax free (- my pension for the year will be £3400 - and in previous tax years it has never been more than this)

TOTAL TAX FREE AMOUNT £10611

Do my tax free amounts look right?  
I did withdraw all money from another pension this year as a one off payment (which i had never touched before). but the lump sum I received was net - after tax deductions so wouldn’t count I assume

Your "salary" is of no relevance.

What do you expect your P60 from "My workplace" to show your taxable pay from this employment as for 2024-25?

Same for "My pension", do you think this will be ~£3,400 on your P60?

Do you mean you have taken money from another pension? If so which tax year was this in? If it was in this tax year hat was the taxable amount and tax deducted from this second pension?

Dazed_and_C0nfused

Also, have you transposed some figures or omitted something as 1959 + 5583 + 4969 doesn't equal 12570

Tooyoungtoretire59

For 2024/2025 I expect my p60 will show approx £8500 from workplace and £3400 from my pension.  I took money from an old pension in May this year (i was made redundant last year so needed it, but then got a job in June this year). The one off amount I received was £18,200 and I confirmed with the pension platform that this payment had already had tax deducted.  They confirmed “Transact pay out the net value of a withdrawal from a pension (gross amount less tax paid to HMRC)“

Tooyoungtoretire59

Dazed_and_C0nfused said:

Also, have you transposed some figures or omitted something as 1959 + 5583 + 4969 doesn't equal 12570

Ah yes, I missed out the other pension - it says £59 of this income is tax free.  I will earn £52.08 this year - ie my P60 will show £52.08

Dazed_and_C0nfused

Tooyoungtoretire59 said:

For 2024/2025 I expect my p60 will show approx £8500 from workplace and £3400 from my pension.  I took money from an old pension in May this year (i was made redundant last year so needed it, but then got a job in June this year). The one off amount I received was £18,200 and I confirmed with the pension platform that this payment had already had tax deducted.  They confirmed “Transact pay out the net value of a withdrawal from a pension (gross amount less tax paid to HMRC)“

It's highly likely that the one off pension amount was taxed using the emergency tax code (1257L).

That means you have used a month's worth of your Personal allowance there and slightly complicates things.  But because it's a fairly large amount (for a single month's pension payment) you probably paid too much tax on that.  That will be resolved after the tax year ends, you don't need to do anything yourself.

In normal circumstances I would say your tax code should be this,

Personal Allowance 12,570
Less untaxed interest 2000
Less allowances given to My pension 2070
Tax code allowances at My workplace 8,500

Tax codes being,
850L (My workplace)
207T (My pension)

This would mean no tax was deducted from either the earnings and only tax deducted from the ongoing pension.

HMRC need the expected P60 figures to get the correct tax code.

Dazed_and_C0nfused

Tooyoungtoretire59 said:

Dazed_and_C0nfused said:

Also, have you transposed some figures or omitted something as 1959 + 5583 + 4969 doesn't equal 12570

Ah yes, I missed out the other pension - it says £59 of this income is tax free.  I will earn £52.08 this year - ie my P60 will show £52.08

What do you mean "other pension"?

The one you got nearly £20k from?

Or a third pension you haven't previously mentioned 🤔

molerat

In your on line tax account what does it show for the expected income from each source ?  You should change them to the correct amounts and the codes should sort themselves out. What tax code does the paperwork show for the pension withdrawal - if you emptied it you should have received a P45.

Tooyoungtoretire59

Dazed_and_C0nfused said:

Tooyoungtoretire59 said:

Dazed_and_C0nfused said:

Also, have you transposed some figures or omitted something as 1959 + 5583 + 4969 doesn't equal 12570

Ah yes, I missed out the other pension - it says £59 of this income is tax free.  I will earn £52.08 this year - ie my P60 will show £52.08

What do you mean "other pension"?

The one you got nearly £20k from?

Or a third pension you haven't previously mentioned 🤔

I wish lol. I have 2 pensions I have income from - they are widows pension from my late husbands workplace. It should really be one pension but due to some reason and Im not sure of the reason it had to be split into 2.   This  second one, which I earn £52 a year on, had gone over to a separate page so not showing on the first page of my tax code notice like the others were (my mistake). 

The one I received £18,200 from was totally separate - it was from an old frozen pension of mine from over twenty years ago.  It was sitting there doing nothing and no financial advisor wanted to touch it as it had links to arch cru (if you know, you know). 

Tooyoungtoretire59

molerat said:

In your on line tax account what does it show for the expected income from each source ?  You should change them to the correct amounts and the codes should sort themselves out. What tax code does the paperwork show for the pension withdrawal - if you emptied it you should have received a P45.

The tax code for pension withdrawal just says BR.  Its so complicated, although I “emptied” my portfolio, I still have an amount of £10,000 showing.  However I can never access this amount yet it will always show in my portfolio.  Its related to arch cru - older financial advisors should be aware of arch cru.  It was marketed to financial advisors around 18 years ago as low risk but it was actually very high risk!  All the financial advisors I spoke to confirmed that I will never be able to access the £10,000 showing and it will always show.  As I said - its complicated.