My Latest P55 Claim Issues

Neversurrender

Nomunnofun1 said:

Using those figures your tax will be:

Income £13503 less personal allowance 12570 - £933

Tax at 20% - £186.60
less marriage allowance -£186.60

Tax due NIL

The state pension is taxable but will not suffer tax at source as there is no mechanism so to do. Instead tax will increase at your other sources to cover.

Thanks for the calculation, and I understand it, but what's confusing me is the hmrc workings online

£936 untaxed interest on savings

Has been subtracted from £13, 830

To give

"Yourtotal tax-free amount

£12,894"

They haven't given a single tax code

Just a BRX for my £7,325.65

And 333T for the £3336

Neversurrender

Dazed_and_C0nfused said:

Neversurrender said:

Dazed_and_C0nfused said:

Neversurrender said:

Dazed_and_C0nfused said:

Neversurrender said:

Hi

Recently I completed a P55 as I do at this time every year, in order to claim back the overpaid tax taken when I flexibly drawdown from my private Sipp pension as a lump sum.

I always make sure I stay below my tax threshold, to avoid paying Tax.

My drawdown, together with my other private pension, is total of £13,500

My allowance is £12,570 + Married allowance of £,1260 = £13,830

So you can see I've stayed below my personal threshold.

Now here's  the reason I am posting.

On completing the P55 it asked for a total of untaxed savings interest, so of course an assumption has to be made of what you expect to earn over this current tax year, in taxable interest.

I was able to state £963

So here's the bit I can't get my head around.

HMRC have deducted £963 from my total personal allowance of £13,830 and left me with an allowance of £12,894

This cant be right because I have my £1000 + £5000 minus my married allowance of £1,260 making £4,740 for interest I can earn on savings before paying Tax.

So why did they take it off my taxable income?

So what if I wanted to receive further income in this tax year, I would have to pay more tax because my untaxed savings interest has chewed up some of my tax allowance.

Any advice much appreciated 

Thanks

If this is an updated tax code and you have taken the one and only pension payment for this tax year then I'm at a loss as to what you think the issue is?

Who is going to use this tax code if you aren't taking more money out of the pension in this tax year?

Also, you cannot have a Personal Allowance greater than £12,570.  Marriage Allowance entitles you to a tax reduction, not extra Personal Allowance.

In January I qualify for state pension

So will have 3 months payments in this tax year, estimated to total £2,853

So added to my current pensions the allowance now reduced to £12,894 won't be enough

What I can't understand is why are they knocking the savings interest off my personal allowance in the first place, regardless of if I get married allowance or not I still have at least £5000 as an additional allowance for that savings interest

I think you have totally misunderstood how HMRC work.

They won't know/care/consider if you are expected to get your State Pension in January 2026.  You can defer your State Pension so just because you actually reach State Pension age doesn't mean you will choose to put it into payment.

Also, you are not taxed on the State Pension payments you receive.  It's your entitlement which counts, not what you paid in each tax year.

You refer to "current pensions".  Maybe you could clarify how many pensions you are actively taking money from and when the next payment is due?

Remember you can only use the savings starter rate band once you have used all your Personal Allowance.  And you can only use the savings nil rate band once you have used any savings starter rate band that is available.  At the moment I suspect HMRC are estimating you have some spare Personal Allowance that the interest will use.

OK thanks,

Maybe I have misunderstood, I guess that's why I'm posting :-)

Sorry made slight error before. I forgot I had already included my state pension in the original post, so here's the individual figures

Here's the income expected this tax year.

7th April one off lump sum taxable drawdown £7,325.65

Ongoing  annual DB Pension £3,336

And that state pension I will be taking from next January 2026

Jan to March £2,842 ( I get what you said earlier but nevertheless here it is)

So with reference to your last reply,

Are you saying if state pension puts me above tax threshold I won't pay tax on that state pension?

If your tax code for the ongoing DB pension is 1289M then you will pay no tax on that source of income.  I'm really not sure what issue you think you have here 🤔

DWP do not deduct tax from State Pension payments.  From the start of the 2026-27 tax year you are going to be paying tax on the DB pension as your tax code is likely to be smaller than that pension.  The DB pension payer will deduct tax.

HMRC have deducted £963 from my total personal allowance of £13,830 and left me with an allowance of £12,894

According to my online HMRC account

It shows this

£936 untaxed interest on savings

Has been subtracted from £13, 830

To give

"Yourtotal tax-free amount

£12,894"

They haven't given a single tax code

Just a BRX for my £7,325.65

And 333T for the £3336

Dazed_and_C0nfused

Neversurrender said:

Dazed_and_C0nfused said:

Neversurrender said:

Dazed_and_C0nfused said:

Neversurrender said:

Dazed_and_C0nfused said:

Neversurrender said:

Hi

Recently I completed a P55 as I do at this time every year, in order to claim back the overpaid tax taken when I flexibly drawdown from my private Sipp pension as a lump sum.

I always make sure I stay below my tax threshold, to avoid paying Tax.

My drawdown, together with my other private pension, is total of £13,500

My allowance is £12,570 + Married allowance of £,1260 = £13,830

So you can see I've stayed below my personal threshold.

Now here's  the reason I am posting.

On completing the P55 it asked for a total of untaxed savings interest, so of course an assumption has to be made of what you expect to earn over this current tax year, in taxable interest.

I was able to state £963

So here's the bit I can't get my head around.

HMRC have deducted £963 from my total personal allowance of £13,830 and left me with an allowance of £12,894

This cant be right because I have my £1000 + £5000 minus my married allowance of £1,260 making £4,740 for interest I can earn on savings before paying Tax.

So why did they take it off my taxable income?

So what if I wanted to receive further income in this tax year, I would have to pay more tax because my untaxed savings interest has chewed up some of my tax allowance.

Any advice much appreciated 

Thanks

If this is an updated tax code and you have taken the one and only pension payment for this tax year then I'm at a loss as to what you think the issue is?

Who is going to use this tax code if you aren't taking more money out of the pension in this tax year?

Also, you cannot have a Personal Allowance greater than £12,570.  Marriage Allowance entitles you to a tax reduction, not extra Personal Allowance.

In January I qualify for state pension

So will have 3 months payments in this tax year, estimated to total £2,853

So added to my current pensions the allowance now reduced to £12,894 won't be enough

What I can't understand is why are they knocking the savings interest off my personal allowance in the first place, regardless of if I get married allowance or not I still have at least £5000 as an additional allowance for that savings interest

I think you have totally misunderstood how HMRC work.

They won't know/care/consider if you are expected to get your State Pension in January 2026.  You can defer your State Pension so just because you actually reach State Pension age doesn't mean you will choose to put it into payment.

Also, you are not taxed on the State Pension payments you receive.  It's your entitlement which counts, not what you paid in each tax year.

You refer to "current pensions".  Maybe you could clarify how many pensions you are actively taking money from and when the next payment is due?

Remember you can only use the savings starter rate band once you have used all your Personal Allowance.  And you can only use the savings nil rate band once you have used any savings starter rate band that is available.  At the moment I suspect HMRC are estimating you have some spare Personal Allowance that the interest will use.

OK thanks,

Maybe I have misunderstood, I guess that's why I'm posting :-)

Sorry made slight error before. I forgot I had already included my state pension in the original post, so here's the individual figures

Here's the income expected this tax year.

7th April one off lump sum taxable drawdown £7,325.65

Ongoing  annual DB Pension £3,336

And that state pension I will be taking from next January 2026

Jan to March £2,842 ( I get what you said earlier but nevertheless here it is)

So with reference to your last reply,

Are you saying if state pension puts me above tax threshold I won't pay tax on that state pension?

If your tax code for the ongoing DB pension is 1289M then you will pay no tax on that source of income.  I'm really not sure what issue you think you have here 🤔

DWP do not deduct tax from State Pension payments.  From the start of the 2026-27 tax year you are going to be paying tax on the DB pension as your tax code is likely to be smaller than that pension.  The DB pension payer will deduct tax.

HMRC have deducted £963 from my total personal allowance of £13,830 and left me with an allowance of £12,894

According to my online HMRC account

It shows this

£936 untaxed interest on savings

Has been subtracted from £13, 830

To give

"Yourtotal tax-free amount

£12,894"

They haven't given a single tax code

Just a BRX for my £7,325.65

And 333T for the £3336

So as you have already taken the payment BR (non cumulative) is only relevant if you opted to take a further payment in this tax year.

And 333T means no tax will be deducted from the DB pension.

What is it you think is wrong?

Neversurrender

Dazed_and_C0nfused said:

Neversurrender said:

Dazed_and_C0nfused said:

Neversurrender said:

Dazed_and_C0nfused said:

Neversurrender said:

Dazed_and_C0nfused said:

Neversurrender said:

Hi

Recently I completed a P55 as I do at this time every year, in order to claim back the overpaid tax taken when I flexibly drawdown from my private Sipp pension as a lump sum.

I always make sure I stay below my tax threshold, to avoid paying Tax.

My drawdown, together with my other private pension, is total of £13,500

My allowance is £12,570 + Married allowance of £,1260 = £13,830

So you can see I've stayed below my personal threshold.

Now here's  the reason I am posting.

On completing the P55 it asked for a total of untaxed savings interest, so of course an assumption has to be made of what you expect to earn over this current tax year, in taxable interest.

I was able to state £963

So here's the bit I can't get my head around.

HMRC have deducted £963 from my total personal allowance of £13,830 and left me with an allowance of £12,894

This cant be right because I have my £1000 + £5000 minus my married allowance of £1,260 making £4,740 for interest I can earn on savings before paying Tax.

So why did they take it off my taxable income?

So what if I wanted to receive further income in this tax year, I would have to pay more tax because my untaxed savings interest has chewed up some of my tax allowance.

Any advice much appreciated 

Thanks

If this is an updated tax code and you have taken the one and only pension payment for this tax year then I'm at a loss as to what you think the issue is?

Who is going to use this tax code if you aren't taking more money out of the pension in this tax year?

Also, you cannot have a Personal Allowance greater than £12,570.  Marriage Allowance entitles you to a tax reduction, not extra Personal Allowance.

In January I qualify for state pension

So will have 3 months payments in this tax year, estimated to total £2,853

So added to my current pensions the allowance now reduced to £12,894 won't be enough

What I can't understand is why are they knocking the savings interest off my personal allowance in the first place, regardless of if I get married allowance or not I still have at least £5000 as an additional allowance for that savings interest

I think you have totally misunderstood how HMRC work.

They won't know/care/consider if you are expected to get your State Pension in January 2026.  You can defer your State Pension so just because you actually reach State Pension age doesn't mean you will choose to put it into payment.

Also, you are not taxed on the State Pension payments you receive.  It's your entitlement which counts, not what you paid in each tax year.

You refer to "current pensions".  Maybe you could clarify how many pensions you are actively taking money from and when the next payment is due?

Remember you can only use the savings starter rate band once you have used all your Personal Allowance.  And you can only use the savings nil rate band once you have used any savings starter rate band that is available.  At the moment I suspect HMRC are estimating you have some spare Personal Allowance that the interest will use.

OK thanks,

Maybe I have misunderstood, I guess that's why I'm posting :-)

Sorry made slight error before. I forgot I had already included my state pension in the original post, so here's the individual figures

Here's the income expected this tax year.

7th April one off lump sum taxable drawdown £7,325.65

Ongoing  annual DB Pension £3,336

And that state pension I will be taking from next January 2026

Jan to March £2,842 ( I get what you said earlier but nevertheless here it is)

So with reference to your last reply,

Are you saying if state pension puts me above tax threshold I won't pay tax on that state pension?

If your tax code for the ongoing DB pension is 1289M then you will pay no tax on that source of income.  I'm really not sure what issue you think you have here 🤔

DWP do not deduct tax from State Pension payments.  From the start of the 2026-27 tax year you are going to be paying tax on the DB pension as your tax code is likely to be smaller than that pension.  The DB pension payer will deduct tax.

HMRC have deducted £963 from my total personal allowance of £13,830 and left me with an allowance of £12,894

According to my online HMRC account

It shows this

£936 untaxed interest on savings

Has been subtracted from £13, 830

To give

"Yourtotal tax-free amount

£12,894"

They haven't given a single tax code

Just a BRX for my £7,325.65

And 333T for the £3336

So as you have already taken the payment BR (non cumulative) is only relevant if you opted to take a further payment in this tax year.

And 333T means no tax will be deducted from the DB pension.

What is it you think is wrong?

In answer to that, I just can't understand the method in them taking my savings interest off my personal allowance

My HMRC account shows this.

£936 untaxed interest on savings

Has been subtracted from £13, 830

To give

"Yourtotal tax-free amount

£12,894"

Dazed_and_C0nfused

Neversurrender said:

Dazed_and_C0nfused said:

Neversurrender said:

Dazed_and_C0nfused said:

Neversurrender said:

Dazed_and_C0nfused said:

Neversurrender said:

Dazed_and_C0nfused said:

Neversurrender said:

Hi

Recently I completed a P55 as I do at this time every year, in order to claim back the overpaid tax taken when I flexibly drawdown from my private Sipp pension as a lump sum.

I always make sure I stay below my tax threshold, to avoid paying Tax.

My drawdown, together with my other private pension, is total of £13,500

My allowance is £12,570 + Married allowance of £,1260 = £13,830

So you can see I've stayed below my personal threshold.

Now here's  the reason I am posting.

On completing the P55 it asked for a total of untaxed savings interest, so of course an assumption has to be made of what you expect to earn over this current tax year, in taxable interest.

I was able to state £963

So here's the bit I can't get my head around.

HMRC have deducted £963 from my total personal allowance of £13,830 and left me with an allowance of £12,894

This cant be right because I have my £1000 + £5000 minus my married allowance of £1,260 making £4,740 for interest I can earn on savings before paying Tax.

So why did they take it off my taxable income?

So what if I wanted to receive further income in this tax year, I would have to pay more tax because my untaxed savings interest has chewed up some of my tax allowance.

Any advice much appreciated 

Thanks

If this is an updated tax code and you have taken the one and only pension payment for this tax year then I'm at a loss as to what you think the issue is?

Who is going to use this tax code if you aren't taking more money out of the pension in this tax year?

Also, you cannot have a Personal Allowance greater than £12,570.  Marriage Allowance entitles you to a tax reduction, not extra Personal Allowance.

In January I qualify for state pension

So will have 3 months payments in this tax year, estimated to total £2,853

So added to my current pensions the allowance now reduced to £12,894 won't be enough

What I can't understand is why are they knocking the savings interest off my personal allowance in the first place, regardless of if I get married allowance or not I still have at least £5000 as an additional allowance for that savings interest

I think you have totally misunderstood how HMRC work.

They won't know/care/consider if you are expected to get your State Pension in January 2026.  You can defer your State Pension so just because you actually reach State Pension age doesn't mean you will choose to put it into payment.

Also, you are not taxed on the State Pension payments you receive.  It's your entitlement which counts, not what you paid in each tax year.

You refer to "current pensions".  Maybe you could clarify how many pensions you are actively taking money from and when the next payment is due?

Remember you can only use the savings starter rate band once you have used all your Personal Allowance.  And you can only use the savings nil rate band once you have used any savings starter rate band that is available.  At the moment I suspect HMRC are estimating you have some spare Personal Allowance that the interest will use.

OK thanks,

Maybe I have misunderstood, I guess that's why I'm posting :-)

Sorry made slight error before. I forgot I had already included my state pension in the original post, so here's the individual figures

Here's the income expected this tax year.

7th April one off lump sum taxable drawdown £7,325.65

Ongoing  annual DB Pension £3,336

And that state pension I will be taking from next January 2026

Jan to March £2,842 ( I get what you said earlier but nevertheless here it is)

So with reference to your last reply,

Are you saying if state pension puts me above tax threshold I won't pay tax on that state pension?

If your tax code for the ongoing DB pension is 1289M then you will pay no tax on that source of income.  I'm really not sure what issue you think you have here 🤔

DWP do not deduct tax from State Pension payments.  From the start of the 2026-27 tax year you are going to be paying tax on the DB pension as your tax code is likely to be smaller than that pension.  The DB pension payer will deduct tax.

HMRC have deducted £963 from my total personal allowance of £13,830 and left me with an allowance of £12,894

According to my online HMRC account

It shows this

£936 untaxed interest on savings

Has been subtracted from £13, 830

To give

"Yourtotal tax-free amount

£12,894"

They haven't given a single tax code

Just a BRX for my £7,325.65

And 333T for the £3336

So as you have already taken the payment BR (non cumulative) is only relevant if you opted to take a further payment in this tax year.

And 333T means no tax will be deducted from the DB pension.

What is it you think is wrong?

In answer to that, I just can't understand the method in them taking my savings interest off my personal allowance

My HMRC account shows this.

£936 untaxed interest on savings

Has been subtracted from £13, 830

To give

"Yourtotal tax-free amount

£12,894"

That will be for one of two reasons,

1.  The estimated interest is £936 and that is using some (currently) unused tax code allowances.

2.  The estimated interest is more than £936 and £936 of it is using (currently) unused tax code allowances.

Banks have until 30 June to report interest details for 2024-25 so the current interest amount HMRC will be estimating is almost certainly based on the amount reported for 2023-24.

Neversurrender

Dazed_and_C0nfused said:

Neversurrender said:

Dazed_and_C0nfused said:

Neversurrender said:

Dazed_and_C0nfused said:

Neversurrender said:

Dazed_and_C0nfused said:

Neversurrender said:

Dazed_and_C0nfused said:

Neversurrender said:

Hi

Recently I completed a P55 as I do at this time every year, in order to claim back the overpaid tax taken when I flexibly drawdown from my private Sipp pension as a lump sum.

I always make sure I stay below my tax threshold, to avoid paying Tax.

My drawdown, together with my other private pension, is total of £13,500

My allowance is £12,570 + Married allowance of £,1260 = £13,830

So you can see I've stayed below my personal threshold.

Now here's  the reason I am posting.

On completing the P55 it asked for a total of untaxed savings interest, so of course an assumption has to be made of what you expect to earn over this current tax year, in taxable interest.

I was able to state £963

So here's the bit I can't get my head around.

HMRC have deducted £963 from my total personal allowance of £13,830 and left me with an allowance of £12,894

This cant be right because I have my £1000 + £5000 minus my married allowance of £1,260 making £4,740 for interest I can earn on savings before paying Tax.

So why did they take it off my taxable income?

So what if I wanted to receive further income in this tax year, I would have to pay more tax because my untaxed savings interest has chewed up some of my tax allowance.

Any advice much appreciated 

Thanks

If this is an updated tax code and you have taken the one and only pension payment for this tax year then I'm at a loss as to what you think the issue is?

Who is going to use this tax code if you aren't taking more money out of the pension in this tax year?

Also, you cannot have a Personal Allowance greater than £12,570.  Marriage Allowance entitles you to a tax reduction, not extra Personal Allowance.

In January I qualify for state pension

So will have 3 months payments in this tax year, estimated to total £2,853

So added to my current pensions the allowance now reduced to £12,894 won't be enough

What I can't understand is why are they knocking the savings interest off my personal allowance in the first place, regardless of if I get married allowance or not I still have at least £5000 as an additional allowance for that savings interest

I think you have totally misunderstood how HMRC work.

They won't know/care/consider if you are expected to get your State Pension in January 2026.  You can defer your State Pension so just because you actually reach State Pension age doesn't mean you will choose to put it into payment.

Also, you are not taxed on the State Pension payments you receive.  It's your entitlement which counts, not what you paid in each tax year.

You refer to "current pensions".  Maybe you could clarify how many pensions you are actively taking money from and when the next payment is due?

Remember you can only use the savings starter rate band once you have used all your Personal Allowance.  And you can only use the savings nil rate band once you have used any savings starter rate band that is available.  At the moment I suspect HMRC are estimating you have some spare Personal Allowance that the interest will use.

OK thanks,

Maybe I have misunderstood, I guess that's why I'm posting :-)

Sorry made slight error before. I forgot I had already included my state pension in the original post, so here's the individual figures

Here's the income expected this tax year.

7th April one off lump sum taxable drawdown £7,325.65

Ongoing  annual DB Pension £3,336

And that state pension I will be taking from next January 2026

Jan to March £2,842 ( I get what you said earlier but nevertheless here it is)

So with reference to your last reply,

Are you saying if state pension puts me above tax threshold I won't pay tax on that state pension?

If your tax code for the ongoing DB pension is 1289M then you will pay no tax on that source of income.  I'm really not sure what issue you think you have here 🤔

DWP do not deduct tax from State Pension payments.  From the start of the 2026-27 tax year you are going to be paying tax on the DB pension as your tax code is likely to be smaller than that pension.  The DB pension payer will deduct tax.

HMRC have deducted £963 from my total personal allowance of £13,830 and left me with an allowance of £12,894

According to my online HMRC account

It shows this

£936 untaxed interest on savings

Has been subtracted from £13, 830

To give

"Yourtotal tax-free amount

£12,894"

They haven't given a single tax code

Just a BRX for my £7,325.65

And 333T for the £3336

So as you have already taken the payment BR (non cumulative) is only relevant if you opted to take a further payment in this tax year.

And 333T means no tax will be deducted from the DB pension.

What is it you think is wrong?

In answer to that, I just can't understand the method in them taking my savings interest off my personal allowance

My HMRC account shows this.

£936 untaxed interest on savings

Has been subtracted from £13, 830

To give

"Yourtotal tax-free amount

£12,894"

That will be for one of two reasons,

1.  The estimated interest is £936 and that is using some (currently) unused tax code allowances.

2.  The estimated interest is more than £936 and £936 of it is using (currently) unused tax code allowances.

Banks have until 30 June to report interest details for 2024-25 so the current interest amount HMRC will be estimating is almost certainly based on the amount reported for 2023-24.

Thanks for your reply

That £936 was declared by me on my P55 just submitted, in answer to the question on the P55 asking for total of unpaid tax on interest which I forecast for this new tax year