How is taxed worked out - year to date or projected earnings per year

HappyHippy_17

Hoping someone can help without me having to spend hours trying to get through to the HMRC and I'm not sure of I'm in the right section of the forum. I have 2 pensions - one deferred DB from 2006 and one DC pension I'm currently paying into.  Both mature this November but I want to carry on working whilst drawing down my DB pension.  I'm not sure how the HMRC will view this wrt to my tax coding as when you add my salary to my pension income for a complete year I will go into the 40% tax bracket.  However, this will be from Nov 24 to Mar 25 (5 months) and then potentially Apr to Nov 25 (8 months) which is when I will retire completely as I'll get state pension. When I add up what I've earned so far this year plus the 5 months pension drawdown I stay below that higher tax bracket - and the same for the 8 months next year.  Have I understood that right?  Does it go on earnings so far or the potential income for the whole year. I'm not very knowledgeable on how tax is worked out  - I  really don't want to pay the extra tax if I can help it!

Albermarle

The final calculation for 24/25 will be done after the tax year ends. It will look at your total earnings for the 12 months to calculate the tax you should have paid ( so no 40% in your case) . If you have paid too much tax ( which is possible in your case) HMRC will refund you the difference. It will be approx 5 months after the end of the tax year, unless you chase it up with them earlier.
The same will apply for 25/26, if 8 months pay + 8 months DB pension + 5 months SP is still below the higher rate threshold.

On a separate point DC pensions do not usually mature at a certain date. Most can be taken from age 55 and at any age later, or not at all ( and passed on as a legacy) . They usually have 65 in their system as a default retirement age, when they write to you with options but normally you can just leave it be if you like. There can be exceptions though. 

HappyHippy_17

Many thanks.  I'll still be contributing to my DC but want to take my DB as I'm needing the TFLS this year.  It's just juggling everything so I don't lose out!