Pensions, interest and tax code; help wanted!

Kacc

Over the last 12 months I have begun to receive my state pension; on top of a teachers' pension and small one from a workplace.

I also receive taxable interest which is now above £10k due to current interest rates.

Over the last couple of years - before the state pension - I've filled in a self-assessment tax form; and paid my tax partly as a lump sum and partly out of my TP.

After April 6 will HMRC see how much I have earned (pensions + interest) and adjust my tax code automatically to take the tax that I owe this tax year directly from my TP; and I fill my tax form in later so any irregularities are corrected? 

Thinking I've already "put aside" an amount equal to the tax I think I owe for 24/5 and could pay it as a lump sum.

I'm finding the whole thing very confusing and little help on HMRC's websites.

Thanks!

Dazed_and_C0nfused

Kacc said:

Over the last 12 months I have begun to receive my state pension; on top of a teachers' pension and small one from a workplace.

I also receive taxable interest which is now above £10k due to current interest rates.

Over the last couple of years - before the state pension - I've filled in a self-assessment tax form; and paid my tax partly as a lump sum and partly out of my TP.

After April 6 will HMRC see how much I have earned (pensions + interest) and adjust my tax code automatically to take the tax that I owe this tax year directly from my TP; and I fill my tax form in later so any irregularities are corrected? 

Thinking I've already "put aside" an amount equal to the tax I think I owe for 24/5 and could pay it as a lump sum.

I'm finding the whole thing very confusing and little help on HMRC's websites.

Thanks!

If you are registered for Self Assessment and will continue to file a return then just think of anything that happens via your tax code as an interim stage.

It is your tax return that finalises things, showing any extra tax owed or refund due if too much tax was deducted (under PAYE in this instance).

If there is a specific element that is confusing what is it?

Kacc

Dazed_and_C0nfused said:

Kacc said:

Over the last 12 months I have begun to receive my state pension; on top of a teachers' pension and small one from a workplace.

I also receive taxable interest which is now above £10k due to current interest rates.

Over the last couple of years - before the state pension - I've filled in a self-assessment tax form; and paid my tax partly as a lump sum and partly out of my TP.

After April 6 will HMRC see how much I have earned (pensions + interest) and adjust my tax code automatically to take the tax that I owe this tax year directly from my TP; and I fill my tax form in later so any irregularities are corrected? 

Thinking I've already "put aside" an amount equal to the tax I think I owe for 24/5 and could pay it as a lump sum.

I'm finding the whole thing very confusing and little help on HMRC's websites.

Thanks!

If you are registered for Self Assessment and will continue to file a return then just think of anything that happens via your tax code as an interim stage.

It is your tax return that finalises things, showing any extra tax owed or refund due if too much tax was deducted (under PAYE in this instance).

If there is a specific element that is confusing what is it?

I know that the interest earned 24/25 hasn't been taxed so I'm expecting to either pay a lump sum, or have it deducted; I don't know how you choose - I'm assuming they deduct it in 25/6 out of my main pension (and the tax form sent later simply corrects any issues)?

molerat

Is 25/26 not showing in your on line tax account yet / received code notification?

Kacc

molerat said:

Is 25/26 not showing in your on line tax account yet / received code notification?

When I took my first month of state pension, my tax code was altered to take the tax on that out of my TP, I expected that and all good. It's the tax on savings interest that's bothering me.

I would be happy to (a) have all the income tax from my three pensions taken out of my TP (that would be about £150/month) and (b) simply pay off my savings interest tax as a lump sum after handing in my tax form.

But are they gonna start taking my savings interest tax out of my TP from Apr 6?

Kacc

Adds 25/26 tax code isn't showing yet; I'll have a look

Kacc

It's currently 828L

Dazed_and_C0nfused

Kacc said:

It's currently 828L

It's the breakdown that counts really.

That is an extremely high code for a recent State Pension recipient 😳

Kacc

Dazed_and_C0nfused said:

Kacc said:

It's currently 828L

It's the breakdown that counts really.

That is an extremely high code for a recent State Pension recipient 😳

The amount they take off monthly is correct; Roughly my pension income is 6000* + 7750 + 1250 =15000 less 12500 (appx) tax free = 2500 x 20% = 500 / 12 = £42 month they are taking in tax; but that takes no account of the tax due on my interest savings which is why I put enough into a "pot" every month to cover.
* 6 months state pension - only kicked in in Oct

squirrelpie

Just FWIW, I'm not registered for self-assessment and I get my state pension, another pension, and some bank interest. It's all taxed automatically by taking money from my other pension at what seems to be the right rate, and I don't have to do anything at all.

What happens if you are registered for self-assessment I do not know, and whether tax on interest is taken automatically for all banks etc I do not know. But for me it all just works.

Dazed_and_C0nfused

Kacc said:

Dazed_and_C0nfused said:

Kacc said:

It's currently 828L

It's the breakdown that counts really.

That is an extremely high code for a recent State Pension recipient 😳

The amount they take off monthly is correct; Roughly my pension income is 6000* + 7750 + 1250 =15000 less 12500 (appx) tax free = 2500 x 20% = 500 / 12 = £42 month they are taking in tax; but that takes no account of the tax due on my interest savings which is why I put enough into a "pot" every month to cover.
* 6 months state pension - only kicked in in Oct

Ok, I thought your reply to previous comments meant 828L was the code that had been calculated for 2025-26 tax code, not the current tax year!

Adds 25/26 tax code isn't showing yet; I'll have a look

It's currently 828L