Income Tax Allowances

hansi

From discussions I have had following their receipt of my P161, I can categorically say that DEEFINITELY, the £9030 tax allowance for over 65's starts in the tax year commencing 5 April 2008! I have had my Coding Notice which states my personal allowance to be £9030. Check with them again.

Catfriend

Thank you very much, Hansi. The girl I spoke to this morning in the Salford tax office definitely said the increased allowance wouldn't start until I actually reached 65, so if she is giving out the wrong information, that is very unhelpful to people. Yes, I will check again, and hopefully Cardiff will recode me correctly this time once they have processed the P161. I just hope they tell the Salford office! Meanwhile, I suppose tax will be deducted and I will have to wait for it to be repaid at some stage.

hansi

Catfriend, with regard to your query and my reply, it was confirmed by a tax expert on the BBC's "Working Lunch" today,that the higher allowance of £9030 would apply if your 65th birthday falls on any date in the tax year. I know that sound a bit Irish but it confirms what I have said is right ,and it also confrims that what your tax office told you is wrong.

Mikeyorks

Catfriend wrote: »

but it is difficult to argue with the tax office!

But it does make it easier when you're right? Which you are. The increased allowance is due in the year you reach 65 .... as link below :

http://www.hmrc.gov.uk/pensioners/reducing-pa.htm

Relevant bit is here, just below the first table :

If you become 65 or 75 during the year to 5 April 2009, you are entitled to the allowance for that age group.

As your income is below £21800 (the threshold at which they start to claw the £9030 back towards the basic personal allowance of £5435) .. there should be no issues in getting it resolved. Can't guarantee their processing of the P161 will fix it .... so it's take the anti-stress tablets and ring them.

Can't understand why any businesses put untrained staff on the 'phones - it's becoming an increasing hazard.

System

The pension enquiry form will allow the tax offices to work out which is your main source of PAYE income. Generally that will be the one that pays you the most. In your case Catfriend that will be the largest private pension.

HMRC will then arrange it that the tax office which deals with that PAYE source will be your main tax office and you will be given your personal tax free allowances against that source/pension. If there are none left over by the time your main pension and your state pension are taken into consideration then your smaller source/pension will be coded BR. If there is a balance of allowances left over then it can be allocated to your second pension.
Your main tax office will instruct the tax office dealing with your second source/pension on what tax codes to issue.

You are entitled to your full age allowances of £9030 now provided your income from all sources this year (08/09) are less than £21800.

Catfriend

Thank you all so much for your replies. I am much happier now I know the true situation for certain. Apart from my State pension, my largest pension will be my occupational pension which will be dealt with by the Cardiff office where I returned the P161, so as they weren't accepting phone calls today I will write to them over the weekend to make sure that they are dealing with it, as it has been a month now since I returned the form.

I feel so sorry for people who don't have access to the internet and wonderful sites like this where you can get help from 'real' people.

Thank you all once again.