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Informing HMRC of retiring and tax code?
MetaPhysical
Posts: 527 Forumite
I am retiring at the end of December and I am currently a 40% tax payer with my employment and I will remain a 40% tax payer of course for the rest of this tax year when my employment ceases in December. I am also currently in receipt of a small pension from my late wife and I have a D0 code against it, i.e. it is fully taxed at 40% since my annual allowance is consumed by my employment.
From 6th April 2026 I will be a basic rate tax payer, with my income coming from three pension schemes. This is what I will be in receipts of:
Small widower's pension currently in payment - £9k PA
A workplace DB that will pay 22k PA - not started this yet.
A UFPLS payment from my SIPP for £25k at the start of next tax year.
So what I was planning to do at the end of March is telling them online I will no longer be in employment and my income will be about 45k per annum. Is this the best way or would a phone call in January be better? How do HMRC ensure that this gets propagated to my three sources of income in April so that I am not paying 40% tax on everything? Can I tell them that I want the PA to be allocated to the larger DB scheme for example?
Thank you.
EDIT: Corrected the D0 tax code (thanks)
From 6th April 2026 I will be a basic rate tax payer, with my income coming from three pension schemes. This is what I will be in receipts of:
Small widower's pension currently in payment - £9k PA
A workplace DB that will pay 22k PA - not started this yet.
A UFPLS payment from my SIPP for £25k at the start of next tax year.
So what I was planning to do at the end of March is telling them online I will no longer be in employment and my income will be about 45k per annum. Is this the best way or would a phone call in January be better? How do HMRC ensure that this gets propagated to my three sources of income in April so that I am not paying 40% tax on everything? Can I tell them that I want the PA to be allocated to the larger DB scheme for example?
Thank you.
EDIT: Corrected the D0 tax code (thanks)
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Comments
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I'd do it online to save the frustration of waiting on the phone. And if they don't change things immediately you will get a refund of overpayments fairly promptly. At least that was my experience.I’m a Forum Ambassador and I support the Forum Team on Debt Free Wannabe, Old Style Money Saving and Pensions boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
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Are you sure it's 0L against the pension. A straight 40% tax code should be D0.1
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Apologies, that's correct, I will edit it. THankyou.Isthisforreal99 said:Are you sure it's 0L against the pension. A straight 40% tax code should be D0.0 -
Can I tell them that I want the PA to be allocated to the larger DB scheme for example?
Yes you can request this.
However you can not do that until it actually starts paying a regular income, and is showing on your personal tax account.
When you change income streams like this, it will inevitably take some time before it all settles down.0
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