tax allowance cut

trevjl

Asking for a friend - no really.
He has one pension which brings in over the personal tax allowance but not over base 20% rate. one very small one as well. combine would be well below the 40% threshold
he has received notice that his allowance has been reduced from £12570 to £9991 
"Allowances allocated to other earnings and/or pension" is the explanation. He has no idea what that is or means. 
Any pointers please
 

DE_612183

it could be that one can be taxed at source the other can't - and the one that can has been increased to take account of the one that can't.

Albermarle

DE_612183 said:

it could be that one can be taxed at source the other can't - and the one that can has been increased to take account of the one that can't.

That was my initial thought as well.
If that was the case the result would be more tax than before on the pension allocated the reduced personal allowance, but no tax at all on the other one.

Like when you get the state pension, your personal allowance with any other taxable income stream is decreased ( mine to about zero) so the tax due on the SP is taken from your other income.

LHW99

Could he have a lot of taxable interest that HMRC have only just caught up to?

Dazed_and_C0nfused

trevjl said:

Asking for a friend - no really.
He has one pension which brings in over the personal tax allowance but not over base 20% rate. one very small one as well. combine would be well below the 40% threshold
he has received notice that his allowance has been reduced from £12570 to £9991 
"Allowances allocated to other earnings and/or pension" is the explanation. He has no idea what that is or means. 
Any pointers please
 

It seems most likely that some of his tax code allowances have been allocated to the second small pension.

Although that seems unusual/unnecessary if his main pension is already using all his tax code allowances.

To get to the bottom of this you/he needs to establish the amount payable by each pension in this tax code, what the two tax codes are and the make up of the main one (likely to end with an L, say 999L).

squirrelpie

Maybe the small pension was started first and used some of the allowance, and that carried on when the second, larger pension started. In any event, just give HMRC a call and ask them to change the allocation.

Marcon

trevjl said:

Asking for a friend - no really.
He has one pension which brings in over the personal tax allowance but not over base 20% rate. one very small one as well. combine would be well below the 40% threshold
he has received notice that his allowance has been reduced from £12570 to £9991 
"Allowances allocated to other earnings and/or pension" is the explanation. He has no idea what that is or means. 
Any pointers please
 

Has he got (and if so has he checked) his personal tax account: https://www.gov.uk/personal-tax-account

Is it possible he's received a coding notice in respect of one his pension schemes, and has (or has yet to receive) the coding notice for the second pension in payment? If that's 258, then he's back to the full personal allowance.