State Pension - Change to PAYE Code

MynameisMichaelCane

I am about to start receiving my state pension and have just had notification of changes to my tax code. It looks like I am going to be paying more tax than I expected so I looked at the details. They seem to be expecting my annual income to increase to over £45,000, which is considerably higher than it will actually be. For the past couple of years I have been living off a private pension, which I have supplemented with some short term temporary work. It looks like my tax code is based on an assumption that I will be doing the temporary work again this tax year, however, that is not is case. 
Is it worth contacting HMRC or will it all sort itself out? 

Sarahspangles

MynameisMichaelCane said:

I am about to start receiving my state pension and have just had notification of changes to my tax code. It looks like I am going to be paying more tax than I expected so I looked at the details. They seem to be expecting my annual income to increase to over £45,000, which is considerably higher than it will actually be. For the past couple of years I have been living off a private pension, which I have supplemented with some short term temporary work. It looks like my tax code is based on an assumption that I will be doing the temporary work again this tax year, however, that is not is case. 
Is it worth contacting HMRC or will it all sort itself out? 

You don’t need to contact HMRC, other than via your personal tax account or the HMRC app. You can enter your expected employment income there.

MynameisMichaelCane

Many thanks, I have now changed it.

Dazed_and_C0nfused

MynameisMichaelCane said:

Many thanks, I have now changed it.

What were the two(?) tax codes that had been calculated when HMRC got details of your State Pension?

Changing your estimated income is sensible if you have more accurate info than HMRC's estimate but it won't necessarily change your tax code(s).

Mutton_Geoff

I find the HMRC "declare your expected income" a bit unreliable.

I have SP that effectively uses up my personal allowance, a DB pension that then takes me to the higher rate band then I have a SIPP that I take variable amounts from for discretionary spending.

I'd like the DB scheme to be taxed at 20% then any SIPP drawdown at 40% (plus/minus the adjustments needed up to the band thresholds). What happens in reality is as soon as I go into the 40% band, HMRC send my DB scheme a new tax code and 40% is deducted from the entire DB amount rather than my variable SIPP drawdown.

I pay the correct amount of tax at the end if the year but for neatness, I'd like the 40% to be reserved for the SIPP as overtaxing my DB means I have to dip into my SIPP to use up the 20% allowance.

My workaround is to log into gov gateway and bring my expected SIPP income back down to zero each time a new tax code is issued. Makes my book keeping a lot easier if they just left the DB alone.

Dazed_and_C0nfused

Mutton_Geoff said:

I find the HMRC "declare your expected income" a bit unreliable.

I have SP that effectively uses up my personal allowance, a DB pension that then takes me to the higher rate band then I have a SIPP that I take variable amounts from for discretionary spending.

I'd like the DB scheme to be taxed at 20% then any SIPP drawdown at 40% (plus/minus the adjustments needed up to the band thresholds). What happens in reality is as soon as I go into the 40% band, HMRC send my DB scheme a new tax code and 40% is deducted from the entire DB amount rather than my variable SIPP drawdown.

I pay the correct amount of tax at the end if the year but for neatness, I'd like the 40% to be reserved for the SIPP as overtaxing my DB means I have to dip into my SIPP to use up the 20% allowance.

My workaround is to log into gov gateway and bring my expected SIPP income back down to zero each time a new tax code is issued. Makes my book keeping a lot easier if they just left the DB alone.

Which source has your numerical code (usually with the letter K, L, M or N in).