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Two pensions and tax
Teatotaltone
Posts: 3 Newbie
Hello everyone
This is my first post,I am not the sharpest knife in the draw so any help will be welcomed.
I am almost 60,and at the moment I work for the local council as a road sweeper,I have been paying into the lgps for almost 27 years and meet the 85 year rule. I am also in receipt of a pension from my previous job as a bus driver where I was pensioned off on ill health.
I am also thinking of staying at work for a further 1 year till I am 61 (sept 17)
My question therefore would be
Both my two pensions and full time salary would add up to around £33000 per annum,how would I pay income tax ,would I just take my personal allowance (£11000) off the £33000 and pay tax on £22000 or is this more complicated than meets the eye.
Any help in lay as terms would be very welcome
Thank you
This is my first post,I am not the sharpest knife in the draw so any help will be welcomed.
I am almost 60,and at the moment I work for the local council as a road sweeper,I have been paying into the lgps for almost 27 years and meet the 85 year rule. I am also in receipt of a pension from my previous job as a bus driver where I was pensioned off on ill health.
I am also thinking of staying at work for a further 1 year till I am 61 (sept 17)
My question therefore would be
Both my two pensions and full time salary would add up to around £33000 per annum,how would I pay income tax ,would I just take my personal allowance (£11000) off the £33000 and pay tax on £22000 or is this more complicated than meets the eye.
Any help in lay as terms would be very welcome
Thank you
0
Comments
-
You will pay tax on your total income, in this case £33,000 less the personal allowance which does leave £22,000 taxable as you thought.
If your employed income is greater than £11,000 then your allowance would normally be allocated against that and the remainder taxed along with the pension income.
If no single income source is greater than £11,000 then the tax allowance has to be shared out amongst more than one source of income an HMRC will adjust any under or overpayments at the year end.0 -
Ok thank you greenglide, so
my two pensions would add up to roughly £9828
And my salary would be £23600
so would i be right in saying that my tax for all of these payments would come out of my salary and NOT my pensions.0 -
No.
In practise both pensions will be taxed at 20%.
The earned income will be allocated all of the personal allowance (£11,000 at present) so you will pay tax at 20% on the rest.
They do it this way so that, wherever possible, the personal allowance as allocated against an income which is larger than the allowance so that whenever the allowance changes or the income changes it doesnt make any difference to the other incomes.
In my case I am also working full time and am in receipt of a LGPS pension from local government employment in the 90s. My personal allowance is against my earned income and the pension is taxed at 20% - it has a tax code of "BR".0 -
ok i understand now thank you very much for answers and time taken.0
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