Income Tax Allowances

hansi

I turn 65 in November 2008 and am aware that my personal allowances increase from that age, but do they do so at the start of the new tax year on 6th April 2008 or do I have to wait till the 2009/2010 tax year, and will HMRC pick this up automatically when working out my new tax code for 2008?

RayWolfe

It goes up for the tax year in which you reach 65. You will see it in the new tax coding due soon.

hansi

Thank you :beer:

dzug

They will only pick it up automatically if they know your age - and not necessarily then. There's different forms of 'knowing'.

If it doesn't happen automatically you'll need to remind them

jem16

hansi wrote: »

I turn 65 in November 2008 and am aware that my personal allowances increase from that age, but do they do so at the start of the new tax year on 6th April 2008 or do I have to wait till the 2009/2010 tax year, and will HMRC pick this up automatically when working out my new tax code for 2008?

The increased personal allowance also depends on your income. If you have income over £21,800 you start losing that age-related allowance until it's back at basic personal allowance by around £26k.

hansi

I wish:rolleyes: :rolleyes:

dunstonh

that income includes all pensions, employed income, rental income, dividends and interest on saving accounts.

A few exceptions apply, such as ISAs and investment bonds.

hansi

I still wish:rolleyes: :rolleyes: :rolleyes: :rolleyes:

Milarky

Best day to be born, it appears, would be April 5th or just earlier.

(What are the other rules affecting pension etc and do they clash with the above or not? eg I seem to recall that additional pension - SERPS/S2P- is only earned for tax years completed before you turn 65 - so an April 5th birth loses out 1 year's increment for each year of retirement in exchange for a (one off) year of additional allowance.)

System

If HMRC have your date of birth they will send you a P161 (Pension Enquiry Form) http://www.hmrc.gov.uk/forms/p161-man.pdf so that they can determine how much of your age allowance you are entitled to.

If you don't return it then you don't get the age allowance included in your code.

If you don't receive one then contact HMRC and ask for one or download it from the net.

Catfriend

Sorry to revive this old thread, but I am totally confused and really need some advice. Like the original poster, I also turn 65 in November this year. I retired on 31st March, with my State Pension, a pension from my former employer, the NHS, and a small AVC with Canada Life. Together these three amount to about £7,800 pa. The problem is that the AVC and the NHS pension are administered from different tax offices, the AVC in Salford and the NHS pension in Cardiff. My local tax office is Whitehaven in Cumbria. When I first retired I had a coding notice from Whitehaven saying my allowance for the year 6th April 08-5th April 09 is £9,030 (because I turn 65 in November presumably) and giving me a code of 374P. This was followed by another one from Cardiff giving me a code of 14L (which was the same as when I was working and receiving my State Pension). They also sent a Pension Enquiry Form, which I completed and returned. Today I received yet another code from Salford giving my code as BR and saying that they plan to tell Canada Life to tax me at 20%. I rang Salford and was told that my tax allowance of £9,030 doesn't start until I actually reach the age of 65. In other words, I will have to pay tax until my birthday in November.

Is the Pension Enquiry Form I completed likely to sort out this confusing situation? I have tried ringing my local Tax Office only to be told they are not accepting calls due to an overload. I really did think that the increased allowance covered the whole year in which a person turns 65, so that I would not be liable for any tax, and that is what everyone seems to be saying on this forum, but it is difficult to argue with the tax office!

Thanks.



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