Tax query

Lowtrawler

johnnyren said:

This is what I don’t understand,   All previous wages I received in the last 2 years whether I was paid weekly or fortnightly no tax was paid 
yet when I went on to a monthly wage I get taxed 70 pounds 
I can’t mind if I mentioned it on my op,   But the company changed hands a few months ago ,    There seems to be confusion regarding tax codes during the changeover ,     But how I’ve been taxed is a mystery 

Until you either check in your personal tax account or confirm with your IFA whether the £1400 is made up of any taxable element, we are all just guessing. Did you check in your personal tax account? As I say, it only takes a few minutes to sign-up if you don't already have one.

The new tax code you have been put onto suggests you have over £9,500 of previously untaxed income that has been identified and so is being recovered through your tax code this year. If so, it indicates your £1400 is most likely 25% from your tax free pension pot and 75% from your taxable pension pot. The numbers don't quite match up to the income you have been making from work but they are not far away.

johnnyren

Lowtrawler said:

johnnyren said:

This is what I don’t understand,   All previous wages I received in the last 2 years whether I was paid weekly or fortnightly no tax was paid 
yet when I went on to a monthly wage I get taxed 70 pounds 
I can’t mind if I mentioned it on my op,   But the company changed hands a few months ago ,    There seems to be confusion regarding tax codes during the changeover ,     But how I’ve been taxed is a mystery 

Until you either check in your personal tax account or confirm with your IFA whether the £1400 is made up of any taxable element, we are all just guessing. Did you check in your personal tax account? As I say, it only takes a few minutes to sign-up if you don't already have one.

The new tax code you have been put onto suggests you have over £9,500 of previously untaxed income that has been identified and so is being recovered through your tax code this year. If so, it indicates your £1400 is most likely 25% from your tax free pension pot and 75% from your taxable pension pot. The numbers don't quite match up to the income you have been making from work but they are not far away.

I’ve spoke to my ifa ,  he says is definitely a mistake ,   This new tax code I’ve got of s350l ,   Indicates that I’m wrongly getting taxed over a personal allowance of 3500 pounds ,       My 1400 is def tax free ,   And I’m allowed 8000 pounds pa 
once I get my gov gateway log in sorted I’ll sort it out with the tax office 

Dazed_and_C0nfused

johnnyren said:

Lowtrawler said:

johnnyren said:

This is what I don’t understand,   All previous wages I received in the last 2 years whether I was paid weekly or fortnightly no tax was paid 
yet when I went on to a monthly wage I get taxed 70 pounds 
I can’t mind if I mentioned it on my op,   But the company changed hands a few months ago ,    There seems to be confusion regarding tax codes during the changeover ,     But how I’ve been taxed is a mystery 

Until you either check in your personal tax account or confirm with your IFA whether the £1400 is made up of any taxable element, we are all just guessing. Did you check in your personal tax account? As I say, it only takes a few minutes to sign-up if you don't already have one.

The new tax code you have been put onto suggests you have over £9,500 of previously untaxed income that has been identified and so is being recovered through your tax code this year. If so, it indicates your £1400 is most likely 25% from your tax free pension pot and 75% from your taxable pension pot. The numbers don't quite match up to the income you have been making from work but they are not far away.

I’ve spoke to my ifa ,  he says is definitely a mistake ,   This new tax code I’ve got of s350l ,   Indicates that I’m wrongly getting taxed over a personal allowance of 3500 pounds ,       My 1400 is def tax free ,   And I’m allowed 8000 pounds pa 
once I get my gov gateway log in sorted I’ll sort it out with the tax office 

Not clear what you mean by that?

Pension income that is "tax free" is different to pension income that falls within your Personal Allowance.  The latter is still taxable income and if you have other income, such as your employment, it will be relevant to your overall tax position.

johnnyren

I’ve spoke to my ifa at length today regarding it ,   He assures me my 1400 pound pension drawdown from my pot is entirely tax free and separate from the earnings from my job
It brings in 6000 pounds a year ,   It’s under my allowance so no tax should have been paid

If he’s wrong then I’ll have to take it from there  

eskbanker

Have you asked your IFA why he's not recommending that you draw down some of the taxable component of your pension, in order to take advantage of the substantial unused portion of your personal allowance, as this is pretty much standard practice for those in your situation?

Dazed_and_C0nfused

johnnyren said:

I’ve spoke to my ifa at length today regarding it ,   He assures me my 1400 pound pension drawdown from my pot is entirely tax free and separate from the earnings from my job
It brings in 6000 pounds a year ,   It’s under my allowance so no tax should have been paid

If he’s wrong then I’ll have to take it from there  

Have you checked your Personal Tax Account yet to see if the pension company have reported any taxable pension income?

MallyGirl

johnnyren said:

I’ve spoke to my ifa at length today regarding it ,   He assures me my 1400 pound pension drawdown from my pot is entirely tax free and separate from the earnings from my job
It brings in 6000 pounds a year ,   It’s under my allowance so no tax should have been paid

If he’s wrong then I’ll have to take it from there  

tax free drawdown (ie from the 25% tax free part of your pension pot) has no relation to allowances. A million pound pot could have a 250k tax free lump sum removed and incur no tax because of what it is rather than being under any sort of allowance

johnnyren

MallyGirl said:

johnnyren said:

I’ve spoke to my ifa at length today regarding it ,   He assures me my 1400 pound pension drawdown from my pot is entirely tax free and separate from the earnings from my job
It brings in 6000 pounds a year ,   It’s under my allowance so no tax should have been paid

If he’s wrong then I’ll have to take it from there  

tax free drawdown (ie from the 25% tax free part of your pension pot) has no relation to allowances. A million pound pot could have a 250k tax free lump sum removed and incur no tax because of what it is rather than being under any sort of allowance

Yes that’s what I have been saying all along ,    There has been an obvious error by hmrc  in taxing my wage ,     

Dazed_and_C0nfused

johnnyren said:

MallyGirl said:

johnnyren said:

I’ve spoke to my ifa at length today regarding it ,   He assures me my 1400 pound pension drawdown from my pot is entirely tax free and separate from the earnings from my job
It brings in 6000 pounds a year ,   It’s under my allowance so no tax should have been paid

If he’s wrong then I’ll have to take it from there  

tax free drawdown (ie from the 25% tax free part of your pension pot) has no relation to allowances. A million pound pot could have a 250k tax free lump sum removed and incur no tax because of what it is rather than being under any sort of allowance

Yes that’s what I have been saying all along ,    There has been an obvious error by hmrc  in taxing my wage ,     

But how/why would that happen if your pension company had never reported any taxable pension income 🤔

squirrelpie

johnnyren said:

There has been an obvious error by hmrc  in taxing my wage

 That sounds likely but until you check your personal tax record for yourself, you only have your IFA's opinion for that. And they might be mistaken.