Income Tax on DB Payment

mw1966

I have been drawing on a DB whilst still in work so have been paying 40% tax.

I am now about to retire and will not be in the 40% tax bracket anymore. Do I need to inform my DB provider or will it all work out in the end?

flaneurs_lobster

Your employer will tell HMRC that you have ceased employment, HMRC will then issue a revised tax code to your pension payer. Might take a month or three to catch up.

Marcon

https://forums.moneysavingexpert.com/discussion/6653042/income-tax-on-db-payment

HMRC will be responsible for issuing a new tax code to your DB provider so nothing you need to do. You can follow 'events' on your personal tax account: https://www.gov.uk/personal-tax-account

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81863355#Comment_81863355

You would be wise to follow this advice. HMRC often seem to have problems when people leave employment, or start new employment, so worth keeping an eye on your tax account online.

SacredStephan

Have you considered making a personal pension or SIPP contribution before April? This would have the effect of reducing your 40% tax liability in this tax year.

MetaPhysical

https://forums.moneysavingexpert.com/discussion/comment/81863347#Comment_81863347

Exactly. This has happened to me this month. Only took a coule of weeks for the pension provider to get the tax code. I'm also a 40% tax payer in this tax year. In the new tax year starting in April I will be a 20% tax payer. What triggers HMRC to tell the pension providers to tax at 20% ??

DRS1

https://forums.moneysavingexpert.com/discussion/comment/81866668#Comment_81866668

Isn't that inherent in the code? If you go from D0 to 1257L then it will just happen won't it?