Never really thought about it . Suppose it depends what you earn and how you are taking your pension etc. If you were a 20% tax payer I think march and take out as much as you can before you reach 40% and then gives you free rein in the April to start again. 40% payer probably April starting with a fresh year as most average joes won’t be taking 50k a year from a pension. That would be my first thought but would be loads of other stuff to think of
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Retirement
- Thread starter Shieldsman
- Start date
niallquinnsdisco
Midfield
A year?!
FootballFan
Striker
I received a letter from them 6 months after the tax year concerned had ended
Not what you want to hear but ultimately you are responsible for it. Codes can correct themselves at points during the tax year like so surprised they didn’t. If your income is from a number of sources did you not get any coding letters at all either just before or during the tax year at all?
niallquinnsdisco
Midfield
Phew, I must have misread, through that bit of thread. Had skimmed the latest pages. Sorry
Kent_Mackem
Striker
I meant to write cows. If I typed crows it was a typo.
The plot thickens. Just realised that my Teacher's Pension, which is for a modest amount and not something I receive a payslip for, has had the emergency tax code k993 applied to it and has now been adjusted to 652L. This is most likely because I left HMPPS in October so am no longer earning as much, in fact considerably less.
This action has resulted in a tax refund that I wasn't anticipating and more or less cancels out the arrears due at the end of the month.
This of course is great news, but by fuck, does it really need to be so stressful? My earnings are all visible in real-time to HMRC and yet it takes them up to 18 months to spot fluctuating wages and to make adjustments. So much for IT and AI in particular set to help with things like this.
For those that don't know, tax arrears are no longer recovered via tax code adjustments, you have to either cough it up in a oner, or call them once it's due and to setup a payment plan.
Is this true? It may be different if you fill in a tax return, for instance, as I do, because I often have adjustments to tax code to make up shortfalls. Might depend on the amounts perhaps.
Agree that these things are far from straightforward and there must be plenty of unintentional errors taking place.
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K isn’t an emergency code. I won’t go on as I don’t know all your ins and outs. The one issue I would have is you not getting tax codes for the start of the year. It’s really up to you to update how much you will likely earn as it becomes quite complex across multiple income sources especially pensions when people dip into them.
When I called HMRC they explained this to me. Following the tax year where I accrued arrears of £3k due this month, they stated that I'd been put on a K tax code to ensure that the same thing doesn't happen again this year I.e. under payment of tax. The difference is though, I've subsequently packed in the job that they based my projected earnings on, so have now overpaid.
They definitely said that payment in full or a "payment plan" was now the only way to pay back the arrears. I'd imagine there are 10s of thousands of people stunned and crippled by this.
Matt Hopkins
Winger
When did this start? I had mine adjusted for this tax year
42
Striker
I know last year, the misses got a tax demand relating to some workplace private health insurance. So she just informed payroll, who in turn corrected tax code. Would imagine it'll be because, if have a few different private pension funds where there isn't a payroll service, so will need to do it yourself.
Presumably because you've packed in the job they decided they can't recoup the tax through payroll?
I've had mine adjusted for this year too, too brutally as it happens, hence the refund.
It's the tax year 2023/24 that is the issue. I did a lot well paid, but unplanned overtime and I now know that I should have been tracking my total annual earnings and in particular watching out for the £50'271 higher tax bracket.
It's little wonder that those who've retired and have private pensions aren't tempted to get back into work. Even a modest income on top of good pensions will see you paying 40%. And yet we're called "financially inactive"" despite paying sheds of tax.
No. I was still in that job, although about to leave, when I spoke to them. I was pretty gobsmacked when they told me I'd need to pay it in a lumper, or get the equivalent of a Provi loan.
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I got a letter from HMRC with a new tax code due to company car changing and there was a line saying they believe I owe them £441. No detail as to why. So I looked at my HMRC account online - no detail and can’t send them a message. Rang them and the waiting time was flagged as 20 minutes.
Bring on the AI revolution!
Indeed but I guess (at least if you're taking a pension in drawdown, rather than as an annuity) you can adjust the amount you take out and balance it with earnings from work to try to avoid higher rate tax.
Problem of course is that higher rate tax starts at much more modest levels than it ever used to...and if a couple is largely relying on one partner's income/pension there's a good chance that person will need to be a higher rate taxpayer in retirement anyway.
BILLY BUS PASS
Winger
It was always arrears up to 1k was taken from ya tax code anything over that and ya had to stump it up.
Dunno if that’s changed but that’s what it used to be.
I've now changed to a part time delivery job with no intention of doing any overtime, so shouldn't get close to the 40% threshold.
Matt Hopkins
Winger
I was never anywhere near paying 40% tax when I was working, I'm even further away from paying it now I've packed in 
