Delayed tax benefits of Age Allowances

Primrose

I've just read that in the years where an individual reaches 65 or 75 (when the increased Age tax allowances kick in) the Revenue delay adjusting your coding notice so you pay less tax until the date of your actual birthday when actually the additional Age Allowance starts from April 6th in the year you reach those ages. This means that those people whose 65th or 75th birthdays birthdays are in February or March have their allowances delayed for the best part of a year, even though they are eventually backdated.
Apparently if you're in this situation, you can write to your tax authority, ask for a specific form and your additional tax benefits will then kick in as soon as your form is completed and returned.

Tarasam

Must admit i've never heard that story and i work in PAYE for HMRC. Normally the age related allowances are in the code from the start of the new tax year, i know they are in there now in preparation for the coming year.

If you find this is the case though ring HMRC and ask for a P161 Pension Enquiry form and this will solve it, or get the staff member to check your code to make sure you are receiving the correct allowances. Only takes 2 mins to do.

To add though, the age related allowances are income based and if you're over a set level they will be reduced.

Mikeyorks

As post #2 .... that's a new one on me. Where HMRC are aware of your dob they will normally include the allowance in the coding from the start of the year of your birthday. It's only a week or so since I read a thread on exactly that and with a precise link to a specific HMRC page .. but can't find it when needed!

However (3rd item down) there's a statement here which supports that from 'Working Lunch' :-

http://news.bbc.co.uk/2/hi/programmes/working_lunch/4631168.stm

whatatwit

Just a shame the 'working lunch' article failed to mention that the age allowances are income restricted.
It is very possible that a person who has a 65th birthday towards the end of the tax year, but continues to work until 65, will not get the full allowance.

And, it is total income including investment income, not just earned income that counts.

gloucesteroldspot

whatatwit wrote: »

Just a shame the 'working lunch' article failed to mention that the age allowances are income restricted.
It is very possible that a person who has a 65th birthday towards the end of the tax year, but continues to work until 65, will not get the full allowance.

And, it is total income including investment income, not just earned income that counts.

Does anybody know whether income from ISA's and other tax exempt sources count against the increased allowance? They shouldn't really, by definition, but I'll bet they do. (Or if not it's a loophole that the parsimonious PM will close very quickly!)

whatatwit

gloucesteroldspot wrote: »

Does anybody know whether income from ISA's and other tax exempt sources count against the increased allowance? They shouldn't really, by definition, but I'll bet they do. (Or if not it's a loophole that the parsimonious PM will close very quickly!)

As far as I recall, the interest from ISA's does not count towards total taxable income, as it wouldn't be shown on a return.