Moving from Alpha to Partnership - tax code change question.

Dazed_and_C0nfused

SimonSeys said:

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. 

Nope, you cannot have a Personal Allowance greater than £12,570.

You can have more tax code allowances, but that is totally different to your Personal Allowance.

When it comes to additional tax relief due on relief at source pension contributions your tax code can never be accurate if the underlying taxable earnings aren't accurate.

How much do you expect your P60 to show your taxable earnings as for the year to 5 April 2026?

SimonSeys

Dazed_and_C0nfused said:

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.

Yes. That’s right.  I think HMRC use the term ‘tax free amount’ which is up by £9k.  I expect my p60 to,show c. £100k, but gov.uk is showing c. £67k with a tax code of 2150L

Dazed_and_C0nfused

SimonSeys said:

Dazed_and_C0nfused said:

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.

Yes. That’s right.  I think HMRC use the term ‘tax free amount’ which is up by £9k.  I expect my p60 to,show c. £100k, but gov.uk is showing c. £67k with a tax code of 2150L

Ok, in your original post you seemed confused about your contributions.

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. 

It is the gross contributions which is important, not the net amount you referred to.

So if your (gross) contribution was £3,500 for say 10 months then that is £35,000 for the current tax year. 

If your taxable earnings are going to increase to ~£100k (following the increase from not contributing to Alpha, which is a net pay pension scheme) then based on what you have posted so far you would receive higher rate relief on the whole lot.  With the (incorrect) estimated earnings of £67k your additional relief would be much more limited.

With earnings of ~£100k and gross RAS contributions of £35,000 you could expect additional tax code allowances of £17,500.  But your actual gross contribution will determine the correct estimate to be used in your tax code.

Note the tax code is only ever provisional, the final position will be reviewed once the tax year is finished.

SimonSeys

Dazed_and_C0nfused said:j

SimonSeys said:

Dazed_and_C0nfused said:

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.

Yes. That’s right.  I think HMRC use the term ‘tax free amount’ which is up by £9k.  I expect my p60 to,show c. £100k, but gov.uk is showing c. £67k with a tax code of 2150L

Ok, in your original post you seemed confused about your contributions.

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. 

It is the gross contributions which is important, not the net amount you referred to.

So if your (gross) contribution was £3,500 for say 10 months then that is £35,000 for the current tax year. 

If your taxable earnings are going to increase to ~£100k (following the increase from not contributing to Alpha, which is a net pay pension scheme) then based on what you have posted so far you would receiving higher rate relief on the whole lot.  With the (incorrect) estimated earnings of £67k your additional relief would be much more limited.

With earnings of ~£100k and gross RAS contributions of £35,000 you could expect additional tax code allowances of £17,500.  But your actual gross contribution will determine the correct estimate to be used in your tax code.

Note the tax code is only ever provisional, the final position will be reviewed once the tax year is finished.

Thanks.  So to be clear, my tax code should be aomething like 3000L?

SimonSeys

And HMRC should have left my taxable earnings at £100k?

Dazed_and_C0nfused

SimonSeys said:

Dazed_and_C0nfused said:j

SimonSeys said:

Dazed_and_C0nfused said:

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.

Yes. That’s right.  I think HMRC use the term ‘tax free amount’ which is up by £9k.  I expect my p60 to,show c. £100k, but gov.uk is showing c. £67k with a tax code of 2150L

Ok, in your original post you seemed confused about your contributions.

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. 

It is the gross contributions which is important, not the net amount you referred to.

So if your (gross) contribution was £3,500 for say 10 months then that is £35,000 for the current tax year. 

If your taxable earnings are going to increase to ~£100k (following the increase from not contributing to Alpha, which is a net pay pension scheme) then based on what you have posted so far you would receiving higher rate relief on the whole lot.  With the (incorrect) estimated earnings of £67k your additional relief would be much more limited.

With earnings of ~£100k and gross RAS contributions of £35,000 you could expect additional tax code allowances of £17,500.  But your actual gross contribution will determine the correct estimate to be used in your tax code.

Note the tax code is only ever provisional, the final position will be reviewed once the tax year is finished.

Thanks.  So to be clear, my tax code should be aomething like 3000L?

Well that would potentially depend on numerous other things not touched on in this thread.  Other taxable income like untaxed interest for example.

But from what you have posted it seems likely that your adjusted net income will be well under £100k, no no tapering of the Personal Allowance.

And depending on what your actual gross RAS pension contributions are you could be (provisionally) due extra tax code allowances in excess of £15k, to give the additional relief due on £30k+ of RAS contributions.

SimonSeys

Dazed_and_C0nfused said:

SimonSeys said:

Dazed_and_C0nfused said:j

SimonSeys said:

Dazed_and_C0nfused said:

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.

Yes. That’s right.  I think HMRC use the term ‘tax free amount’ which is up by £9k.  I expect my p60 to,show c. £100k, but gov.uk is showing c. £67k with a tax code of 2150L

Ok, in your original post you seemed confused about your contributions.

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. 

It is the gross contributions which is important, not the net amount you referred to.

So if your (gross) contribution was £3,500 for say 10 months then that is £35,000 for the current tax year. 

If your taxable earnings are going to increase to ~£100k (following the increase from not contributing to Alpha, which is a net pay pension scheme) then based on what you have posted so far you would receiving higher rate relief on the whole lot.  With the (incorrect) estimated earnings of £67k your additional relief would be much more limited.

With earnings of ~£100k and gross RAS contributions of £35,000 you could expect additional tax code allowances of £17,500.  But your actual gross contribution will determine the correct estimate to be used in your tax code.

Note the tax code is only ever provisional, the final position will be reviewed once the tax year is finished.

Thanks.  So to be clear, my tax code should be aomething like 3000L?

Well that would potentially depend on numerous other things not touched on in this thread.  Other taxable income like untaxed interest for example.

But from what you have posted it seems likely that your adjusted net income will be well under £100k, no no tapering of the Personal Allowance.

And depending on what your actual gross RAS pension contributions are you could be (provisionally) due extra tax code allowances in excess of £15k, to give the additional relief due on £30k+ of RAS contributions.

Nothing extra like other taxable income. 

What do you think my tax code shoukd be (roughly) assuming £30k RAS contributions?

Thanks in advance,
S
.

Marcon

SimonSeys said:

Love the detective work, if a little creepy

Nothing creepy, honest! Simply a case of one click to see your other posts and check if the info was there.

Dazed_and_C0nfused

SimonSeys said:

Dazed_and_C0nfused said:

SimonSeys said:

Dazed_and_C0nfused said:j

SimonSeys said:

Dazed_and_C0nfused said:

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.

Yes. That’s right.  I think HMRC use the term ‘tax free amount’ which is up by £9k.  I expect my p60 to,show c. £100k, but gov.uk is showing c. £67k with a tax code of 2150L

Ok, in your original post you seemed confused about your contributions.

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. 

It is the gross contributions which is important, not the net amount you referred to.

So if your (gross) contribution was £3,500 for say 10 months then that is £35,000 for the current tax year. 

If your taxable earnings are going to increase to ~£100k (following the increase from not contributing to Alpha, which is a net pay pension scheme) then based on what you have posted so far you would receiving higher rate relief on the whole lot.  With the (incorrect) estimated earnings of £67k your additional relief would be much more limited.

With earnings of ~£100k and gross RAS contributions of £35,000 you could expect additional tax code allowances of £17,500.  But your actual gross contribution will determine the correct estimate to be used in your tax code.

Note the tax code is only ever provisional, the final position will be reviewed once the tax year is finished.

Thanks.  So to be clear, my tax code should be aomething like 3000L?

Well that would potentially depend on numerous other things not touched on in this thread.  Other taxable income like untaxed interest for example.

But from what you have posted it seems likely that your adjusted net income will be well under £100k, no no tapering of the Personal Allowance.

And depending on what your actual gross RAS pension contributions are you could be (provisionally) due extra tax code allowances in excess of £15k, to give the additional relief due on £30k+ of RAS contributions.

Nothing extra like other taxable income. 

What do you think my tax code shoukd be (roughly) assuming £30k RAS contributions?

Thanks in advance,
S
.

2757L.

But other than by a mathematical quirk it will only be that if the gross RAS contributions are exactly £30,000 and your estimated taxable earnings are at least £80,270.

What did you actually tell HMRC your RAS contributions would be in 2025/26?

And how much did you tell them your estimated taxable earnings would be in 2025/26?

SimonSeys

Dazed_and_C0nfused said:

SimonSeys said:

Dazed_and_C0nfused said:

SimonSeys said:

Dazed_and_C0nfused said:j

SimonSeys said:

Dazed_and_C0nfused said:

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.

Yes. That’s right.  I think HMRC use the term ‘tax free amount’ which is up by £9k.  I expect my p60 to,show c. £100k, but gov.uk is showing c. £67k with a tax code of 2150L

Ok, in your original post you seemed confused about your contributions.

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. 

It is the gross contributions which is important, not the net amount you referred to.

So if your (gross) contribution was £3,500 for say 10 months then that is £35,000 for the current tax year. 

If your taxable earnings are going to increase to ~£100k (following the increase from not contributing to Alpha, which is a net pay pension scheme) then based on what you have posted so far you would receiving higher rate relief on the whole lot.  With the (incorrect) estimated earnings of £67k your additional relief would be much more limited.

With earnings of ~£100k and gross RAS contributions of £35,000 you could expect additional tax code allowances of £17,500.  But your actual gross contribution will determine the correct estimate to be used in your tax code.

Note the tax code is only ever provisional, the final position will be reviewed once the tax year is finished.

Thanks.  So to be clear, my tax code should be aomething like 3000L?

Well that would potentially depend on numerous other things not touched on in this thread.  Other taxable income like untaxed interest for example.

But from what you have posted it seems likely that your adjusted net income will be well under £100k, no no tapering of the Personal Allowance.

And depending on what your actual gross RAS pension contributions are you could be (provisionally) due extra tax code allowances in excess of £15k, to give the additional relief due on £30k+ of RAS contributions.

Nothing extra like other taxable income. 

What do you think my tax code shoukd be (roughly) assuming £30k RAS contributions?

Thanks in advance,
S
.

2757L.

But other than by a mathematical quirk it will only be that if the gross RAS contributions are exactly £30,000 and your estimated taxable earnings are at least £80,270.

What did you actually tell HMRC your RAS contributions would be in 2025/26?

And how much did you tell them your estimated taxable earnings would be in 2025/26?

Thanks @Dazed_and_C0nfused 

Ignoring the fact this started in June, I told HMRC that I would be making contributions of £25.6k (net) or £32k (gross).  I put both numbers in my message to HMRC.

Checking gov.uk, my taxable earnings have reduced from £100k to £68k, and my tax code calculation shows an assumption of a £9k pension contribution.

i guess I need to talk to HMRC to get them to change my taxable earnings back to £100k, and personal pension contributions to £32k?

Any views on whether to do this over the phone or through the online form.   The people I speak to on the phone have varying levels of expertise.  Some very good, others are less experienced 

Thanks,
Si