Working whilst drawing the state pension.

baileysbattlebus

I receive a pension - I took early retirement at 50 and after a year or so decided to go back to work - I opted to use my personal allowance for my pension and my tax code for my salary is BR (I pay tax on everything), I also pay tax on my pension every month, though not a huge amount. (not sure if you have the choices with state pension regarding where the tax allowance is used.) I rang the tax office and I had the choice of my tax allowance being used on my pension or salary the choice was mine.

Check your taxcode on your payslip, has it changed from 534 to BR, if it has then the tax allowance is with your pension and has been removed from your salary.
But yes add the 2 together and that is your income

seedo

Hi there
my tax code at the moment is K66 and will change to K67 for year
2008-2009.

seedo

Yes they have change my coding to K66 for year 2007-2008 but
I feel they have done this too early because my state pension
was not effective till 25/Feb 2008.

boobbby

When do I get my over 65 allowance (£9030) I am just 64 (March)at the moment but will be 65 before April 2009. My PAYE coding notice received in January (when I was 63) states that from 6th April 2008 to 5th April 2009 my personal allowance is £5435. Is this correct?

boobbby

seedo wrote: »

Hello everyone
I have just become a state pensioner from 25/2/2008 not received any pension as yet. Can someone explain the taxation on state pension, I have had a notice of coding from the tax office for 6/Apr2008 to 5/Apr 2009
stating personal allowance £5435 plus £60 for job expenses.
My state pension is £6179 which bring my state pension over my personal
allowance by £684 so tax will be due on £684.
On my wage slips at work since 2nd Feb 2008 they have taken off an extra
£200 in tax, although I have not received any pension. How much tax should
I have to pay on £684?

Thanks Seedo

I asume you are a female because a man on a state pension would have an allowance of £9030.

jem16

margaretclare wrote: »

No, they're exactly the same. See:

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

boobbby was correct in what he was saying.

A man will be 65 before he collects his state pension and therefore be able to have the higher allowance.

At the moment any woman from aged 60-64 who is also in receipt of the state pension is not able to get the higher allowance until they turn 65.

boobbby

margaretclare wrote: »

boobbby did not make that clear, that it was age which was the determining factor. A woman at 65 has exactly the same personal allowances for tax.

The point was that the person I was replying said they was on a state pension but only had and allowance of £5435. (only females can get a state pension and that allowance)
I have also been given an incorrect allowance of £5435 for 08/09 although I will be 65 in March 2009

sixtytwo

If you are drawing the state pension,how much are you allowed to earn before it becomes taxable?

jem16

sixtytwo wrote: »

If you are drawing the state pension,how much are you allowed to earn before it becomes taxable?

Assuming you are 62 as your username you can have income of £5435 as from April 6th before it becomes taxable.

seven-day-weekend

sixty-two, you will start paying tax when your TOTAL income from all sources is more than your tax code allows. So if your tax code is 543 you can have income from all sources of £5435 before you pay any tax.