Adjusting income via personal tax statement
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Savvy_Sue
Posts: 46,030 Forumite
in Cutting tax
hello, just checking something for DH.
He has started to draw a private pension and has had two other sources of income so far this tax year: one is erratic self-employment (not a lot and he does a tax return) and the other is invigilation at the university for which he's just been paid.
When he first logged in, HMRC said his tax codes should be 777NX for the pension and 288T for the university. The university actually used code BR but hey ho.
HMRC are assuming that he'd continue to be paid by the University for the rest of the tax year, which he won't. He may do more invigilation, he may get another - possibly even regular! - job, but nothing is certain.
So we've told HMRC he won't receive anything more from the university, and they've automatically adjusted his tax code for the pension, which is useful.
We know we'll need to adjust his income again if he gets any other employment, but does that strategy make sense?
I know we can sort it all out when he does his tax return for 2018-19, and he may well have to pay tax on the self-employment (hasn't had to so far), and yes he may even reach a position where it's not worth me claiming marriage allowance, but if his pension and employment were roughly right I reckon life will be simpler.
He has started to draw a private pension and has had two other sources of income so far this tax year: one is erratic self-employment (not a lot and he does a tax return) and the other is invigilation at the university for which he's just been paid.
When he first logged in, HMRC said his tax codes should be 777NX for the pension and 288T for the university. The university actually used code BR but hey ho.
HMRC are assuming that he'd continue to be paid by the University for the rest of the tax year, which he won't. He may do more invigilation, he may get another - possibly even regular! - job, but nothing is certain.
So we've told HMRC he won't receive anything more from the university, and they've automatically adjusted his tax code for the pension, which is useful.
We know we'll need to adjust his income again if he gets any other employment, but does that strategy make sense?
I know we can sort it all out when he does his tax return for 2018-19, and he may well have to pay tax on the self-employment (hasn't had to so far), and yes he may even reach a position where it's not worth me claiming marriage allowance, but if his pension and employment were roughly right I reckon life will be simpler.
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Without any real clue as to the amounts involved difficult to say with any real certainty but if he uses all of his (reduced) Personal Allowance against the pension income then as you say he will have tax to pay in respect of the self employment income.
Providing he is expecting that and the tax code for the university is back to BR then seems ok for the moment.0 -
Make sure that his "best" tax code is for his permanent (lifelong eg pension) income. You can tell HMRC where you want that to go. I have no idea why they believe his pension should be on a week one/month one basis as it will leave (if it is going to apply from July onwards) with 3 months tax allowance unused!0
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Take a look at dori2o's post at #14 in this thread.
https://forums.moneysavingexpert.com/showthread.php?p=744147670 -
Thanks, that's all very helpful.Signature removed for peace of mind0
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