General Chat

Help!!! can anybody tell me how many tax code number you have at the same time. Do you have one for you enployment & one for your pension? thanks

Yes, you do.

You main tax code should be applied to the highest income (usually your salary) and the basic rate will be applied to your pension payment.

Any under/over payments are accounted for at the end of each tax year, and over payments repaid or underpayments recouped by either adjusting your main tax allowance or by an immediate repayment request.

Sue

I would have said the opposite. My personal allowance allows me a tax free state pension, the same as the rest of pensioners. The remainder of that allowance is the code that my works pension is taxable (the larger of the two amounts)-jl
Edit
I may have misunderstood, are we talking receiving a salary and paying for a pension or receiving a pension from employment and a state pension?

I took the OP as meaning whilst still in employment and receiving a private pension...lol we need more details.

I agree with Sue - if you have two part time jobs, both have different tax codes applied.
As she says, the 'main' one has the personal allowance applied to it and thus a lower code.

You can also get the personal allowance swapped during the year if it appears that you will be earning more from the 2nd job than the 1st

If you have any doubts that you've been taxed correctly, fill up a self assessment tax for at the end of the financial year.

Well I guess he has got the answer...either way..lol- j

Thank's for your reply's. Last week my wife had a letter from the tax man stating she owe's them £830. This we do not understand as she paid tax on her earnning & her pension income. So today we when to our local tax office, &guess what....only open on thur & fri. Got back home &another letter from the taxman...this time as far as i can work it out she owe's over £2000. What is the taxman up to?

Don't know Malcolm but I wish you good luck.

Obviously ask for a full breakdown and get them to ascertain what code was applied by both the employer and pension provider. Once you have that info then the next step is to find out from both of those WHO instructed them to apply the code they have been using.

10 of so years ago my son got lumbered with a huge bill for his company car because THEY forgot to adjust his tax code!

Hopefully it's one of their 'internal errors'.

Sue

Good luck with the tax man; sometimes it seems that 2 different offices are looking at seperate issues!
If you've got the time to 'hold the line' try calling HMRC. Their computers have managed to join up (most of) the dots and the Advisor may be able to sort it out.

It may seem an extra expense, but for peace of mind you could employ an accountant to sort it out for you. The Tax man seems more ready to believe an Accountant than he would you.

This has happened to a lot of people Malcolm. What has happened in some cases is that the employer has in error carried on using the old single person tax code AFTER state pension income has started to be paid which effectively means a full personal allowance carries on without taking into account the state pension being paid. Your wife's case may be different though.

I would check the tax code notices she has received from HMRC for the years involved to see if her pension as well as other income is included on them. If so, compare those codes with the one the employer has used. (shown on her end of year P60s) If the employer has not used the same tax code as that issued by HMRC then it could be that the employer has not used the correct codes as issued to him.

This is what the Employer's booklet says:

CWG2 Employer Further Guide to PAYE and NICs
"As a general rule, you as the employer have to pay
any underpayment of PAYE arising from a mistake in
deductions. However, a direction can be made for
your employee to pay an underpayment if we are
satisfied that you took reasonable care and that
the underpayment arose from an error made in
good faith."

If you do telephone HMRC, ring the number on the letter at 8.00am.........much better chance of getting through then!

Many thank's for your reply's. Just looked at the address of the letters & yes they are from different office's. On today's letter it state's how much her income was each year & how much tax to pay, but not how much she has already paid. When we go to the tax office they will tie us up in knotts "twisting words" to suit them

Look at the top right hand corner of the notice you have had Malcolm. If it is the kind of letter I think it is it should say 'Tax Paid' and show the amount paid underneath as 'A'. The letters are set out horribly and not easy to follow at all.

You tax code represents your tax free allowance. If you multiply the number in your tax code by ten, you will get the total amount of income you can earn in a year before paying tax. It can also be adjusted up or down if you owe or are owed tax from previous years. The total of all your tax codes can never exceed your total personal allowances, otherwise you will not pay enough tax.

They can be split across employers or pension provides however you choose to make best use of your allowance, but it is usual for your higher income to receive your full tax allowance, and your secondary income to have a zero code.

If your allowance is more than your primary income, then you can ask HMRC to apply the additional allowance to your secondary income.

It's likely that you'll have more than one tax code if you have:

two or more jobs at the same time
income from two or more pensions
pension income and a job

You'll know if you have more than one because HMRC will send you a 'PAYE Coding Notice' for each job or pension. Your PAYE Coding Notice tells you what your tax code is and how HMRC has worked it out.

If for some reason, your tax affairs are being dealt with by more than one office for each source of income , it is possible that HMRC are not aware that you are one and the same person. This has serious repercussions, as most likely it means you are not paying enough tax.

As Annx has already said, you need to check the coding notices for each job or pension to see how they have been worked out.

Incidentally, the State Pension counts as taxable income but is paid to you without tax taken off. However, if your State Pension added to your other income exceeds your tax allowance you will be required to pay tax. Certain State Benefits also count as taxable income.

Many thank's for your reply's, we have an appointment with a "taxman" on Friday. We had phoned the given phone no's, but all we got was recored reply's. What i cannot understand is she (wife) has had 10 code no. changes in the last 5 years, but they (taxmen) still got it wrong.