How long does it take for the tax free allowance to move to pension provider

zaax

I have just retired. How long will it take for pension provider to get my tax allowance code from my employer?

Sarahspangles

zaax said:

I have just retired. How long will it take for pension provider to get my tax allowance code from my employer?

Your pension provider will be given a code by HMRC likely after your first pension payment, and it’s a fresh calculation. What it will be is determined by what HMRC know or assume at that point. There are multiple scenarios, if any of these result in you paying too much tax in your first one or two pension payments, this will work through within the tax year.

If your employment has ended, your former employer will notify HMRC as part of their routine RTI reporting on payroll. So contractual end dates and payroll cycles are a factor in when HMRC get the information.

Once your pension starts it’s most likely you’ll be on an emergency tax code of 1257L on a Month 1 basis until HMRC get the information from your employer. You also have the option of notifying HMRC yourself, if your employer hasn’t.

If you haven’t already, setting up access to your personal tax account on a laptop or via the HMRC app will give you visibility of progress.

squirrelpie

IIRC, you should send your P45 from your employment to the pension provider, to help them with their tax calculations.

dunstonh

zaax said:

I have just retired. How long will it take for pension provider to get my tax allowance code from my employer?

If you had earned income in this tax year, then you should give the pension provider your P45 and they will use that as continuation.    If you haven't given the P45 or you have no earned income in this tax year, then they will put you on Month 1 tax code (often referred to as emergency code) and HMRC should sort it by the next month.   However, if the p45 hasn't been handled yet, then HMRC may still assume you have earned income.