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Tax on pension: Who to contact?

RedDinger

Old-Salt
I just got my first pension payment and it hasn't been taxed. The letter I received also show future payments with no tax.

Who should I contact about this, as I'm in the 40% tax bracket currently. HMRC or Equiniti?
 
I just got my first pension payment and it hasn't been taxed. The letter I received also show future payments with no tax.

Who should I contact about this, as I'm in the 40% tax bracket currently. HMRC or Equiniti?
If you've got a P45 / P60 / Notice of Coding, send that to Equiniti ASP.
 
Had mine also but it displays my tax code (1250L M1) already. I assume i'm paying tax then?
Its not quite that simple - that shows how much income you can have before you need to pay tax - £12500 pa.

If your AFPS pension is your only source of income and its less than £12500 pa, you shouldn't be liable to tax.
 
If your AFPS pension is your only source of income and its less than £12500 pa, you shouldn't be liable to tax.

Does anyone in the tax office have to be told that its your only UK income or can you trouser it without informing anyone (if its below 12500)?
 
I just got my first pension payment and it hasn't been taxed. The letter I received also show future payments with no tax.

Who should I contact about this, as I'm in the 40% tax bracket currently. HMRC or Equiniti?
When I got mine two years ago it was set up with me having a tax code of 1250 on both my pension and my salary, I think. I called HMRC and got them to apply my tax personal allowance to my pension. It then comes through without paying tax on it. I got what was left of my allowance as a tax code on my salary. This means I get my pension with little to no tax on it and my salary is all taxed at the correct rate. I thought that was best as my pension is static and my salary can change over time.

Shorter answer is talk to HMRC and explain the two incomes thing and which income you want the personal allowance applied to. The other will get anything that’s left of your personal allowance.
 
Had mine also but it displays my tax code (1250L M1) already. I assume i'm paying tax then?
You will be if your pension is more than £12,500 per year. Do you have any other incomes? If you also have a salary you need to ensure you don’t have two personal allowances or that you don’t benefit from 20% rate twice.
 
Does anyone in the tax office have to be told that its your only UK income or can you trouser it without informing anyone (if its below 12500)?
I think it’s best to give someone a bell or drop them an email about it. You know how shite the Tax Office can be.
With my wage, pension and AR pay, the tax office upped my tax payments because they had forecast that I was going to earn 85k this year (I won’t get anywhere near this!) They’d worked that out by the end of April, a month into the financial year, after I’d done one AR weekend. *******
 
I couldn't work out if I'd been taxed or not when I got my Army pension at age 60, as I was still employed, I did not really need it but took it anyway. Although it was their mistake, when they caught up with me 6 years later (after I had retired) they took it all in one lump so I ended up short for my first year of retirement. My advice is sort it out now - if you don't need the money, make sure that they are taxing you at the correct rate, because they WILL catch up with you eventually.
 
I just got my first pension payment and it hasn't been taxed. The letter I received also show future payments with no tax.

Who should I contact about this, as I'm in the 40% tax bracket currently. HMRC or Equiniti?

Were you medically discharge?

If not you are right to query it.

Equinity need to be told by the Veterans Agency to change anything. Speak to the Veterans Welfare Service that covers your area.


Dont use the VA general enquiries number (0808 1914 2 18), they really arent much use.
 

Bubbles_Barker

LE
Book Reviewer
I managed 7 different tax codes the year after I left the Army. I then received a tax arrears bill of £105K as the muppets at HMRC thought I should be taxed on my lump sum etc etc.

You couldn't make it up - but they ended up paying me....

Get a proper financial adviser who knows about AFPS and let them loose.
 

RedDinger

Old-Salt
Were you medically discharge?

If not you are right to query it.

Equinity need to be told by the Veterans Agency to change anything. Speak to the Veterans Welfare Service that covers your area.


Dont use the VA general enquiries number (0808 1914 2 18), they really arent much use.
I wasn't medically discharged. I did 6 years a lifetime ago, so its not a lot of money, but I know I need to pay tax on it. But should it be taxed at source, or should I declare it to HMRC so they adjust my tax code?
 
I wasn't medically discharged. I did 6 years a lifetime ago, so its not a lot of money, but I know I need to pay tax on it. But should it be taxed at source, or should I declare it to HMRC so they adjust my tax code?

Taxed at source.

I was MDd and initially taxed. It wasnt a drama as i knew it would happen and followed the process to get it changed.
 
I wasn't medically discharged. I did 6 years a lifetime ago, so its not a lot of money, but I know I need to pay tax on it. But should it be taxed at source, or should I declare it to HMRC so they adjust my tax code?
It should be taxed at source, however the issue you have is that you need two tax codes, one for pension, one for employment. You obviously only get one personal allowance. If you go for your code against your salary then the salary will be taxed correctly. Your pension however will be taxed at 20% even if you tax code is 0. They are not joined up enough to know that your salary plus pension puts you in the 40% bracket so you will pay half the tax in your pension you should.

If you do what I did and get your allowance applied to your pension initially then say you have a pension of £4K you will have a tax code of 400 on your pension. Pension is tax free. You then have £8.5K left of allowance for your salary with a tax code of 850. Your salary will be taxed on everything above £8.5K at 20% initially and then 40% above that limit. You’ll have paid the correct tax.

The first way builds up a debt through the year. The second doesn’t.

Talk to HMRC. They need to set the tax codes for your pension and salary correctly based on your pension level and what’s left over for your salary. It’s pointless talking to Equiniti as they can only look at your pension and they can’t change your tax code on your pension or salary. That’s done by HMRC so call them, explain the pension and salary and they will adjust your tax codes and it’ll all sort itself out between now and April.
 

RedDinger

Old-Salt
Thanks for all your advice people. I got it sorted by HMRC. They are adjusting my tax code to cover this years shortfall.
 

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