Moving from Alpha to Partnership - tax code change question.

SimonSeys

Hi all,

I’ve switched from Alpha to Partnership.  £2,800 a month is deducted by payroll.  L&G add £700 for basic rate tax.  My Department pays £1,500 direct to L&G.  Total is £5,000 or £60k per year.  Perfect. 

Total contributions are £2.8k x 12 = £33.6k, so I think I’m due an extra (40%-20%) x £33.6k = £6.7k refund.  Ie my tax code should be £6.7k / 0.4 =£16.8k higher. 

After submitting forms and a few months of payslips to HMRC, my account now shows that my pensionable earnings are £33.6k lower.  Great.  My tax code has also changed, but only by £9k?

I called earlier to try and understand why.  The person I spoke to said they could only work off YTD earnings, and I would have to submit a claim at the end of the year. 

I did phone at 4:45pm and the phone was picked up at 5:57pm so perhaps this could explain why?

Would appreciate people’s help on understanding what my tax code be and how to fix it before the end of the year.  Am I right in thinking it shoukd be £16.8k above the standard rate?

Thanks in advance

Simon

molerat

To get the full benefit of that amount of pension contribution you need an income in excess of £92700, is that the case ?

Also your gross pension contribution for tax purposes, the amount you need to inform HMRC, is £42K, you need to add the tax contribution to the net amount you pay.

QrizB

SimonSeys said:

I’ve switched from Alpha to Partnership.

When did you switch? April, or more recently?

Dazed_and_C0nfused

SimonSeys said:

Hi all,

I’ve switched from Alpha to Partnership.  £2,800 a month is deducted by payroll.  L&G add £700 for basic rate tax.  My Department pays £1,500 direct to L&G.  Total is £5,000 or £60k per year.  Perfect. 

Total contributions are £2.8k x 12 = £33.6k, so I think I’m due an extra (40%-20%) x £33.6k = £6.7k refund.  Ie my tax code should be £6.7k / 0.4 =£16.8k higher. 

After submitting forms and a few months of payslips to HMRC, my account now shows that my pensionable earnings are £33.6k lower.  Great.  My tax code has also changed, but only by £9k?

I called earlier to try and understand why.  The person I spoke to said they could only work off YTD earnings, and I would have to submit a claim at the end of the year. 

I did phone at 4:45pm and the phone was picked up at 5:57pm so perhaps this could explain why?

Would appreciate people’s help on understanding what my tax code be and how to fix it before the end of the year.  Am I right in thinking it shoukd be £16.8k above the standard rate?

Thanks in advance

Simon

Having left Alpha your taxable income should end up being higher not lower.

Partnership is a relief at source scheme so doesn't reduce your taxable income like Alpha effectively does.

What was your tax code?  What is your new tax code?  What is your estimate of your taxable earnings for 2025/26, taking into account you will now have more taxable income each month?

As it now October how are you getting 12 months worth of Partnership contributions 🤔

Marcon

SimonSeys said:

Hi all,

I’ve switched from Alpha to Partnership.  £2,800 a month is deducted by payroll.  L&G add £700 for basic rate tax.  My Department pays £1,500 direct to L&G.  Total is £5,000 or £60k per year.  Perfect. 

Total contributions are £2.8k x 12 = £33.6k, so I think I’m due an extra (40%-20%) x £33.6k = £6.7k refund.  Ie my tax code should be £6.7k / 0.4 =£16.8k higher. 

Looking at a previous post, you switched to Partnership in June this year https://forums.moneysavingexpert.com/discussion/comment/81604058#Comment_81604058 so won't have a full 12 months in the current tax year.

SimonSeys said:

After submitting forms and a few months of payslips to HMRC, my account now shows that my pensionable earnings are £33.6k lower.  Great.  My tax code has also changed, but only by £9k?

Not sure I understand this. Why would your 'pensionable earnings' be affected? Unlike Alpha, Partnership is a relief at source scheme, so it won't reduce your taxable earnings. Please could you clarify?

You will only receive higher rate tax relief to the extent you've paid higher rate tax on your Partnership contributions in the first place. Are you earning enough to do so?

SimonSeys

molerat said:

To get the full benefit of that amount of pension contribution you need an income in excess of £92700, is that the case ?

Also your gross pension contribution for tax purposes, the amount you need to inform HMRC, is £42K, you need to add the tax contribution to the net amount you pay.

Thanks.  Yes I. earn more than that. 

I sent HMRC details of what is deducted from my salary, that L&G add 25%, and on gov.uk my taxable earnings have reduced by c. £33k. Are you saying that HMRC have made a mistake and they shoukd have refuced by £42k?

thanks,
  S

SimonSeys

QrizB said:

SimonSeys said:

I’ve switched from Alpha to Partnership.

When did you switch? April, or more recently?

June.  But even so my taxable earnings are showing as £33k lower and personal allowance is up by £9k

Dazed_and_C0nfused

SimonSeys said:

QrizB said:

SimonSeys said:

I’ve switched from Alpha to Partnership.

When did you switch? April, or more recently?

June.  But even so my taxable earnings are showing as £33k lower and personal allowance is up by £9k

Your Personal Allowance cannot possibly increase above £12,570.

Do you mean your tax code allowances?

How much do you expect your P60 will show your taxable earnings as for 2025/26?  Remembering that relief at source contributions do not reduce your taxable income.

SimonSeys

Marcon said:

SimonSeys said:

Hi all,

I’ve switched from Alpha to Partnership.  £2,800 a month is deducted by payroll.  L&G add £700 for basic rate tax.  My Department pays £1,500 direct to L&G.  Total is £5,000 or £60k per year.  Perfect. 

Total contributions are £2.8k x 12 = £33.6k, so I think I’m due an extra (40%-20%) x £33.6k = £6.7k refund.  Ie my tax code should be £6.7k / 0.4 =£16.8k higher. 

Looking at a previous post, you switched to Partnership in June this year https://forums.moneysavingexpert.com/discussion/comment/81604058#Comment_81604058 so won't have a full 12 months in the current tax year.

SimonSeys said:

After submitting forms and a few months of payslips to HMRC, my account now shows that my pensionable earnings are £33.6k lower.  Great.  My tax code has also changed, but only by £9k?

Not sure I understand this. Why would your 'pensionable earnings' be affected? Unlike Alpha, Partnership is a relief at source scheme, so it won't reduce your taxable earnings. Please could you clarify?

You will only receive higher rate tax relief to the extent you've paid higher rate tax on your Partnership contributions in the first place. Are you earning enough to do so?

Love the detective work, if a little creepy
Sorry - I meant taxable earnings not pensionable earnings. 

As above, my HMRC account is showing taxable earnings down £33k, presumably as HMRC will adjust my tax code to account for pension contributions. 

Actually that could be it. Prehaps the HMRC processing my request forgot about the £12k personal allowance,
 so my taxable salary shoukd be £45k lower not £33k…

Thanks Macron.

Dazed_and_C0nfused

SimonSeys said:

Marcon said:

SimonSeys said:

Hi all,

I’ve switched from Alpha to Partnership.  £2,800 a month is deducted by payroll.  L&G add £700 for basic rate tax.  My Department pays £1,500 direct to L&G.  Total is £5,000 or £60k per year.  Perfect. 

Total contributions are £2.8k x 12 = £33.6k, so I think I’m due an extra (40%-20%) x £33.6k = £6.7k refund.  Ie my tax code should be £6.7k / 0.4 =£16.8k higher. 

Looking at a previous post, you switched to Partnership in June this year https://forums.moneysavingexpert.com/discussion/comment/81604058#Comment_81604058 so won't have a full 12 months in the current tax year.

SimonSeys said:

After submitting forms and a few months of payslips to HMRC, my account now shows that my pensionable earnings are £33.6k lower.  Great.  My tax code has also changed, but only by £9k?

Not sure I understand this. Why would your 'pensionable earnings' be affected? Unlike Alpha, Partnership is a relief at source scheme, so it won't reduce your taxable earnings. Please could you clarify?

You will only receive higher rate tax relief to the extent you've paid higher rate tax on your Partnership contributions in the first place. Are you earning enough to do so?

Love the detective work, if a little creepy
Sorry - I meant taxable earnings not pensionable earnings. 

As above, my HMRC account is showing taxable earnings down £33k, presumably as HMRC will adjust my tax cost to account for pension contributions. 

Actually that could be it. Prehaps the HMRC processing my request forgot about the £12k personal allowance,
 so my taxable salary shoukd be £45k lower not £33k…

Thanks Macron.

You have totally misunderstood how all this works.  Relief at source pension contributions do not reduce your taxable income.

SimonSeys

Dazed_and_C0nfused said:

SimonSeys said:

Marcon said:

SimonSeys said:

Hi all,

I’ve switched from Alpha to Partnership.  £2,800 a month is deducted by payroll.  L&G add £700 for basic rate tax.  My Department pays £1,500 direct to L&G.  Total is £5,000 or £60k per year.  Perfect. 

Total contributions are £2.8k x 12 = £33.6k, so I think I’m due an extra (40%-20%) x £33.6k = £6.7k refund.  Ie my tax code should be £6.7k / 0.4 =£16.8k higher. 

Looking at a previous post, you switched to Partnership in June this year https://forums.moneysavingexpert.com/discussion/comment/81604058#Comment_81604058 so won't have a full 12 months in the current tax year.

SimonSeys said:

After submitting forms and a few months of payslips to HMRC, my account now shows that my pensionable earnings are £33.6k lower.  Great.  My tax code has also changed, but only by £9k?

Not sure I understand this. Why would your 'pensionable earnings' be affected? Unlike Alpha, Partnership is a relief at source scheme, so it won't reduce your taxable earnings. Please could you clarify?

You will only receive higher rate tax relief to the extent you've paid higher rate tax on your Partnership contributions in the first place. Are you earning enough to do so?

Love the detective work, if a little creepy
Sorry - I meant taxable earnings not pensionable earnings. 

As above, my HMRC account is showing taxable earnings down £33k, presumably as HMRC will adjust my tax cost to account for pension contributions. 

Actually that could be it. Prehaps the HMRC processing my request forgot about the £12k personal allowance,
 so my taxable salary shoukd be £45k lower not £33k…

Thanks Macron.

You have totally misunderstood how all this works.  Relief at source pension contributions do not reduce your taxable income.

Agree.

But they reduce the amount of tax I pay, through an increased personal allowance.