Tax taken

Thecar

Sorry if posted on wrong forum

Tax deductions from my wages

26 apr gross pay £1682.94 tax £334.80

26may gross pay £7841.76

tax £2212.73

26 June gross pay £190.78

tax £38.00

I took voluntary redundancy on 16 May the £7841.76 was the balance off my tax free amount these are the figures from my gov gateway account the may tax does seem to be high to me the government website says my tax

For 6Apr 25 too 5 apr 26 has not been calculated yet any help much appreciated only other income i have is my state pension

Ayr_Rage

What was your state pension for the last tax year?

What is it now?

Thecar

Hi my state pension is £12547

I forgot my private pension which

Is £8000 each per year

Thecar

Private pension is aprox £12000 gross

Ayr_Rage

If you give approximate figures then you won't get an accurate answer.

Please give gross amounts per annum for all income.

What was the gross redundancy payment and when exactly was it paid?

How was it broken down, PILON, Holiday Pay etc?

What tax and NI, if any, was paid?

Thecar

These are the figures

Redundancy pay £30000 tax free

£7841.94 was pilon payment hol

and hrs worked before redundancy

State pension is £12547 per year gross

Private pension is £9588 per year gross tax code for this pension is k177 i dont pay national insurance

chrisbur

Are you asking if the tax deducted is correct, if so you need to give the tax codes that appear on each payslip.I assume they are for month 1 2 and 3.

Month 3 appears to be either 0T or BR with both being non-cumulative. Was this paid after the P45 was issued?

eskbanker

The higher tax payment in May was explained in one of the previous threads about this:

https://forums.moneysavingexpert.com/discussion/comment/82017321#Comment_82017321

Thecar

Many tks understand

Thecar

Tax code on the last pay slip for the £7841 76 is 9l and tax code on private pension is k177

chrisbur

Tax deducted from months one and two, using 9L accumulative, are correct for that tax code (I did actually make the tax figure for month two £2211.73 but a pound is not going to make a lot of differance.)

As I said tax deducted for month 3 did not use 9L either 0T or BR on a non-cumulative code was used, both would give the same tax figure of 20% of £190. I assume that this payment was made after the issue of the P45 which would mean the 9L code could not be used and the code that should be used is 0T non-cumulative. I have seen BR used which was the old procedure, in your case makes no differance.

As advised you paid some tax at 40% on the pay for month 2 This was because of the way PAYE works, your annual tax allowances go up by 1/12th for each month. So in rough figues at month 2 you had to pay tax at 40% on eanings to date this year over £8400. If the month three pay had been done using tax code 9L that would have produced a tax figure that converted the 40% tax to 20% so you would have ended not paying any 40% tax.

I am not sure what your plans for the future are regarding employment. If you are going to work elsewhere give them the P45 and PAYE will do what it is designed to do ie. make adjustments month by month so that you end the year paying the correct tax for your tax code. However if you are not planning on working, and your only income is from state and private pensions of £12547 and £12000 you have paid 40% tax you do not owe and have the wrong tax code for your private pension. This might be adjusted eventually by HMRC when they see your new circumstaces (your could check your personnal tax account to ensure your earnings are now nil). I personally would contact HMRC advise them these pensions are the only income and request that the P45 figures be put onto your private pension with a new cumulative tax code which would adjust the 40% tax down to 20% tax and take account of your lower taxable income.

The above is based on the details given.