HMRC PAYE 26-27

Spivo46

I have been trying to input my projected earnings for the next tax year on the HMRC website. This will include part time job earnings, a small annuity, a state pension due in July and some withdrawals from my DC pension. i have allocated these earnings and submitted them to HMRC online. 2 of the new incomes have been added to the 2 existing incomes. It did not let me give a name to the 2 new earnings. Therefore how will it know how to issue the appropriate tax codes to each income??

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/6655314/hmrc-paye-26-27

Can you explain exactly what you've done?

To be honest it sounds like you may have made life very complicated for yourself.

Do you have 3 PAYE sources on your account, one for the job, one for the annuity and a third for the DC pension?

If you can provide some screenshots with your name and National Insurance number removed it might help understand if you have got this completely wrong.

And HMRC will have absolutely no interest in anything you tell them about your State Pension. They rely on DWP for that information and would never take it into account you are actually entitled to it, not months in advance.

Spivo46

Thank you and your summary is correct - 3 sources if i exclude the state pension. No screen shots available as the information has not yet been processed by HMRC (it can take 15 days). The purpose of doing this was to ensure i start the new year paying the correct amount of tax. My DC pension will be the first withdrawal i have made.

Do you think i should have done nothing and let HMRC figure things out as and when? Last year was a year when i paid zero tax, i was under my personal allowance

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81884476#Comment_81884476

Keeping them upto date is generally a good idea. Do you mean you updated your estimated pay/pension for each of the 3 sources?

It was this comment that confused me as it seemed like you might have tried to add a new source of income, when they all already exist and would just need you to provide an update for the estimated pay/pension.

Maybe you could clarify what it is you seeing as being "added"? Or why they need a name if they already exist as PAYE sources?

2 of the new incomes have been added to the 2 existing incomes. It did not let me give a name to the 2 new earnings

Isthisforreal99

If you haven't touched the DC pension before then HMRC won't have a source for it and won't until the first pension payment is notified to them by the pension payer.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81884490#Comment_81884490

I have a feeling the op has done something without really understanding what they were doing and it could take some unpicking!

Isthisforreal99

https://forums.moneysavingexpert.com/discussion/comment/81884500#Comment_81884500

I agree, think they have tried to 'create' this new DC pension but have only succeeded in adding the income to an existing one. If so, when the pension company does notify HMRC of it HMRC will add it on again.

Spivo46

I was hoping that HMRC would issue a tax code to the pension provider in advance, however i may have assumed wrongly. Wouldn't it be nice if you could inform HMRC of your projected earnings in advance so the correct amount of tax can be calculated and paid. Lets see what chaos develops from here! I will keep interested parties informed.

Isthisforreal99

https://forums.moneysavingexpert.com/discussion/comment/81884530#Comment_81884530

Yes, you have assumed wrong. Unfortunately HMRC can't guess the PAYE reference to issue the code to. Your first DC pension payment will be taxed using 1257L on a month one basis - there is no avoiding it.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81884530#Comment_81884530

What PAYE reference did you tell the pension was being paid under? Do you already know the pension reference/payroll identification number the pension company is going to use?

When you say 2 new income have been added what do you mean?

Unless you sort this out now you may well find HMRC think you have 6 sources of income by the summer 😳

poseidon1

Have to confess, this thread and many like it makes me heartily grateful for being able to completely control my interactions with HMRC and my annual tax outcomes, wholly via self assessment.

As yet I have no PAYE sources of income, and a current tax code of 60L, due to state pension utilising most of the £12,570 personal allowance.

I can therefore anticipate the likely PAYE tax deduction outcome when I eventually commence UFPLSs from my SIPP when that time comes.

Any balancing tax liabilities at each tax year end will continue to be reasonably easily (self) calculated with the additional assistance of the Sipp provider's P60.

I sometimes think people are unreasonably put off the idea of self assessment, because of unfamiliarity but mostly due to being passive PAYE tax payers their entire working lives and therefore completely reliant on their employer's/ pension providers payroll and HMRC's systems to get things rights.

Interesting to note the contrast between UK and USA in this respect, where the vast majority of their working population and retirees ( between 150 to 160 million) do submit income tax returns annually using tax filing services such as HR Block.

The USA in its infinite wisdom placed the onus on it's population to self declare. One wonders whether the general UK population would have a better grasp and perhaps better understand its tax compliance obligations if a similar default system had been devised here.