New tax code today

Montypython

Hi all.

I got my new tax code for year 2008 - 2009 and I don't understand it at all.

Firstly I become 65 in March this year but I have been getting a small British Coal pension of £470 per month.

On the letter it states:-

personall allowance = 5436
state pension = -5747
tax is due on -312

This gives me a tax code of K30

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In the Notes section it states:-

Our records tell us you are entitled to £5435 for this tax year, the personal allowance for people under 65.

Further down it mentions that BT staff scheme will add the £312 to my income and tax the total as follows:-
at 20% on £34600
at 40% on over £34600

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I have been trying to ring them to make sure this right but always kept on hold.
Can anyone give me an indication if anything is wrong with their figures until I manage to get through.

Thanks in advance.

Zazen999

You mean apart from them getting the age wrong - which I would have thought is fundamental now that you are 65!!!

I'd have a look on the website to see what your tax code should be over 65 - and keep calling. There will be an expert along in a moment I should think with more info.

Mikeyorks

The basic personal allowance for 08-09 is £9,030 .. for someone 65 or over. So that looks wrong.

But .... that is reduced by £1 (down to a minimum £5435) for every £2 your income exceeds £21800. As you mention State Pension / Coal Board and BT(?) .... is that the case, in total? Or have they simply not got the fact you're 65 on record??

The reason for the deduction of State Pension from your allowances .. is that the pension is taxable, but the Pensions service don't do it at source. So it's deducted from your allowance - giving a minus figure ... which is added to the pension suffering the aggregated tax .. to get it right.

So - you need to calculate your total expected next year and do some maths if its above £21,800. But looks like they haven't realised you're entitled to an HMRC birthday card!

CLAPTON

it would be eaier to comment if you listed each of your incomes... State pension, British Coal, BT, working????


Subject to your gross pension as you are over 65 you are entitled to a higher personal allowance ... so if your total income will be less than 20,900 you should get a personal allowance of 7,550 (this year's figure)

bryanb

He said BECOME 65 in March this year.

Montypython

I will be 65 3rd march

The only income will be

My state pension = 5747

Coal Board pension = 5643

My wife will get a percetage of my pension which she has been told will be around £50 ish.

note: sorry the BT was a typo error, that should have read:-

Further down it mentions that British Coal Staff Superanuation Scheme will add the £312 to my income and tax the total as follows:-
at 20% on £34600
at 40% on over £34600.

sorry again.

bryanb

If your wife is younger than 60 the allowance will be paid as part of your pension, which could change your income figures

CLAPTON

Contact the tax office and remind them that your will be 65 this tax year so you should the age related allowance next year ( i dont know the figure for 08-09 but its 7550 this year )
so you tax code should be something like

allowance 7550
state pension 5747
so tax code P 180

DeeCee

As Mikeyorks says.... "The basic personal allowance for 08-09 is £9,030 .. for someone 65 or over. So that looks wrong."

Rates here....

http://www.hmrc.gov.uk/rates/it.htm

Montypython

bryanb wrote: »

If your wife is younger than 60 the allowance will be paid as part of your pension, which could change your income figures

My wife was 65 last September.

I thought there was something wrong with the coding.
I am going to phone in the morning first thing brfore they get a queue on.
Will post back what they say.

Thankyou to everyone who responded.

DeeCee

Forgot to say... as you were 65 on the 3 March 08 (was 07) you can claim the full age 65 personal allowance for the tax year 2007/2008 of £7,550

See.....
http://www.hmrc.gov.uk/manuals/inmanual/IN367.htm