Understanding a K tax coding

Fiona_S

I am hoping someone will be able answer a question about my mum's tax code. She has been given a K code and I can't make any sense of the explanation on the tax office website. She gets her state pension and a SMALL personal pension giving her an income just over her tax free allowance ( she is 65) but this month she has had £63 of tax deducted and this seems a lot to me. I know the basic rate has changed but I still can't make sense of the figures. We are going to contact our tax office on Monday but if anyone can enlighten me about the K tax code I would really appreciate it.

julesmum23

a K code is usualy a minus code in other words she has no more tax free allowance so anything earned is highly taxed, where most people get a tax free allowance of 104.51 each week she has a minus figure of whatever her k code is

CLAPTON

a K code is a negative code
this is usually because someone has a state pension; these are paid without tax being deducted; but they are part of taxable income.

so if someone has the state pension and a private pension then the tax payable on the entire income is recovered via a negative code on the private pension

if you want to say
your mothers age
the tax code
the amount of state pension
the amount of private pension
any other income

we could probably check it for you

Fiona_S

She is 65 and has an income of about £9800 from her state pension and her work pension combined. She has no other income at all and I know that any tax due will be taken from her work pension but since her income is only just above her tax allowance of £9030 I thought she would pay tax on the difference and so I don't know why she has a K tax code.

Mikeyorks

Would have been more helpful had you separated out the state / occupational pension sums?

Have a look at the (personalised) P2 (Coding Notice) she received. It's now more helpful than it used to be. Sounds as though she is either not getting the full £9030 personal allowance / the State Pension deduction is mis-stated or there is an underpayment from previous years?

She should only (subject to no deductions you haven't mentioned) be paying £154 tax per annum on £9800

CLAPTON

With the partial info you have provided, it would seem that the HMRC is not giving your mum the age related allowance .... its possible they don't realise she is 65...
best to contact them on Monday.

Fiona_S

Thanks for your replies. We are going to phone tax office on Monday hopefully they will be able to explain and maybe it is a mistake as she has not had any other income since she was 60. No harm in checking with them I guess. Thanks again.

Mikeyorks

Fine ..... but look at the P2 first. That should show exactly where the problem lies. Then you are fore-armed.