UK Tax Code Changes (re State Pension Increases)

[hotandsticky]

A few people have recently received a revised Notice of Coding which increases the amount of tax paid in the next tax year.

 

This change in coding is solely as a result of the expected increase in state pensions. Many expats living in Thailand do not receive the annual increase in pension so, in these circumstances, will be paying too much tax.

 

Check your coding if you receive a new advice and take it up with HMRC if you think you are affected. 

[IvorBiggun2]

I haven't received my 'Notice of Coding' yet but what amount of increase are we talking about?

[BritManToo]

2 minutes ago, IvorBiggun2 said:

I haven't received my 'Notice of Coding' yet but what amount of increase are we talking about?

State pension up from 10k5 to 11k4 so your tax code will be down by 900 pounds.

[proton]

Nothing to do with state pensions, they are still un taxed as bellow the allowance

[Ginkas]

Got an email from HMRC that my Tax Code for next year was available.

Had to go online to see it, looks like they are not sending a paper copy out now.

Yes, State Pension showed an increase so Tax Code changed and increased tax due from my other pension!

Spent most of the last two years getting this corrected from earlier years of increase applied, eventually getting a cheque from HMRC.

 

Contacting them is not easy, the complaints page has gone.

Rang HMRC three days ago, after trying for 5 times, cut off after a few minutes, and then hanging on for 1 hour 10 minutes finally spoke to someone who corrected the error.

Checked online and my Tax Code returned to normal.

I suppose I'll have to do this again next year.  

[Ginkas]

18 minutes ago, proton said:

Nothing to do with state pensions, they are still un taxed as bellow the allowance

Everything to do with State Pensions!

The pension amount comes off your allowance and therefore you pay more tax on other income!

[hotandsticky]

31 minutes ago, proton said:

Nothing to do with state pensions, they are still un taxed as bellow the allowance

 

Rubbish.

 

Everything is taxable.

 

 

The state pension is deducted from the personal allowance and is the residual allowance is applied to private pensions etc.

[hotandsticky]

37 minutes ago, IvorBiggun2 said:

I haven't received my 'Notice of Coding' yet but what amount of increase are we talking about?

 

In two cases friends are paying around GBP 10 p.m. more

[hotandsticky]

17 minutes ago, Ginkas said:

Got an email from HMRC that my Tax Code for next year was available.

Had to go online to see it, looks like they are not sending a paper copy out now.

Yes, State Pension showed an increase so Tax Code changed and increased tax due from my other pension!

Spent most of the last two years getting this corrected from earlier years of increase applied, eventually getting a cheque from HMRC.

 

Contacting them is not easy, the complaints page has gone.

Rang HMRC three days ago, after trying for 5 times, cut off after a few minutes, and then hanging on for 1 hour 10 minutes finally spoke to someone who corrected the error.

Checked online and my Tax Code returned to normal.

I suppose I'll have to do this again next year.  

 

 

There is an obvious flaw in the system that DWP cannot pick up those people with 'frozen' pensions.

[BritManToo]

39 minutes ago, proton said:

Nothing to do with state pensions, they are still un taxed as bellow the allowance

Tax code = 12500 - state pension.

[scubascuba3]

13 minutes ago, BritManToo said:

Tax code = 12500 - state pension.

If state pension hasn't gone up, as frozen, why would the code change? except in error. Assuming no other taxable income

[Moonlover]

If you have an on-line account with HMRC it is a very simple procedure to correct the amount of state pension you're receiving. Your coding will then be amended and the appropriate tax deductor (usually another pension payer) will be informed of the change. 

[Moonlover]

55 minutes ago, proton said:

Nothing to do with state pensions, they are still un taxed as bellow the allowance

Completely wrong. It has everything to do with it. This is a perennial issue with HMRC and the state pension. I've got it sorted now, but it takes persistence.

[noobexpat]

1 hour ago, proton said:

Nothing to do with state pensions, they are still un taxed as bellow the allowance

 

A very poor statement and should be ignored by everyone.

[noobexpat]

1 hour ago, hotandsticky said:

The state pension is deducted from the personal allowance and is the residual allowance is applied to private pensions etc.

 

Not quite.

All income is aggregated and in a specific order.

Then applicable personal allowance is deducted.

Residual income is the taxable amount - tax code generated.

Tax code sent to private pension and collected.

State pension paid gross.

[noobexpat]

59 minutes ago, scubascuba3 said:

If state pension hasn't gone up, as frozen, why would the code change? except in error. Assuming no other taxable income

 

Hmrc can't distinguish who has a frozen state pension and who doesn't. So they simply adjust your tax code by the generic % increase that DWP awarded for that year. 

 

Thats the likely theory, unconfirmed.

[scubascuba3]

6 minutes ago, noobexpat said:

 

Hmrc can't distinguish who has a frozen state pension and who doesn't. So they simply adjust your tax code by the generic % increase that DWP awarded for that year. 

 

Thats the likely theory, unconfirmed.

yep so an error, doesn't surprise me

[noobexpat]

26 minutes ago, scubascuba3 said:

yep so an error, doesn't surprise me

 

Not an error because its not a mistake. 

Like applying an emergency tax code when you start a new job. Incorrect, but not an error.

 

[hotandsticky]

1 hour ago, noobexpat said:

 

Hmrc can't distinguish who has a frozen state pension and who doesn't. So they simply adjust your tax code by the generic % increase that DWP awarded for that year. 

 

Thats the likely theory, unconfirmed.

 

Confirmed............

[hotandsticky]

2 hours ago, scubascuba3 said:

If state pension hasn't gone up, as frozen, why would the code change? except in error. Assuming no other taxable income

 

Wrong assumption.............................otherwise the state pension will always be covered by tax allowance.

[Mutt Daeng]

3 hours ago, Ginkas said:

Got an email from HMRC that my Tax Code for next year was available.

Had to go online to see it, looks like they are not sending a paper copy out now.

Yes, State Pension showed an increase so Tax Code changed and increased tax due from my other pension!

Spent most of the last two years getting this corrected from earlier years of increase applied, eventually getting a cheque from HMRC.

 

Contacting them is not easy, the complaints page has gone.

Rang HMRC three days ago, after trying for 5 times, cut off after a few minutes, and then hanging on for 1 hour 10 minutes finally spoke to someone who corrected the error.

Checked online and my Tax Code returned to normal.

I suppose I'll have to do this again next year.  

HMRC are still sending out tax code notices by post. I got one in mid February. This was after I discovered my tax code was wrong using the HMRC app. I contacted them to sort out the issue after HMRC had "assumed" that I would receive the SP increase and adjusted my tax code to cater for that. I contacted them via their webchat and they "fixed" my tax codes for 23/24 & 24/25. I had to do this last year as well. Looks like it's going to happen every year as someone has already stated, HMRC can't tell (or don't care) who is frozen and who is not, so they assume everyone gets the rise, putting the onus on the individual to check their tax code and then if it's wrong, take steps to have it corrected.

Edited April 6 by Mutt Daeng
typo

[Tropicalevo]

1 hour ago, noobexpat said:

 

A very poor statement and should be ignored by everyone.

Rubbish.

Everyone's circumstances are different.

I only receive the basic state pension from 8 years ago.

I do not pay tax on it.

If you receive other payments then yes, you will pay tax.

[scubascuba3]

46 minutes ago, hotandsticky said:

 

Wrong assumption.............................otherwise the state pension will always be covered by tax allowance.

no not really

[scubascuba3]

1 hour ago, noobexpat said:

 

Not an error because its not a mistake. 

Like applying an emergency tax code when you start a new job. Incorrect, but not an error.

 

Yes it's an error yes it's a mistake, it isn't taking account of the frozen pension correctly

[hotandsticky]

33 minutes ago, scubascuba3 said:

no not really

yes

 

FACT........................nobody solely on state pension will have a pension great than the individual tax allowance

Edited April 6 by hotandsticky

[hotandsticky]

40 minutes ago, Tropicalevo said:

Rubbish.

Everyone's circumstances are different.

I only receive the basic state pension from 8 years ago.

I do not pay tax on it.

If you receive other payments then yes, you will pay tax.

 

It was a poor statement.

[noobexpat]

35 minutes ago, hotandsticky said:

yes

 

FACT........................nobody solely on state pension will have a pension great than the individual tax allowance

 

Incorrect, i'm afraid.

My 85 year old dads state pension is way above the personal allowance.

Just because the maximum now is £x per week ...doesn't mean it was changed retrospectively for anyone else.

 

[noobexpat]

1 hour ago, scubascuba3 said:

Yes it's an error yes it's a mistake, it isn't taking account of the frozen pension correctly

 

Yes ...i do have some sympathy that their systems are not perfect. Nothing ever is.

For 90 something % of the people its working.

[noobexpat]

1 hour ago, Tropicalevo said:

Rubbish.

Everyone's circumstances are different.

I only receive the basic state pension from 8 years ago.

I do not pay tax on it.

If you receive other payments then yes, you will pay tax.

 

You do pay tax on it.

Its at 0% rate.

It is taxable income, but paid gross.

 

This understanding is above your pay grade. Stay in your lane!

 

[proton]

3 hours ago, noobexpat said:

 

A very poor statement and should be ignored by everyone.

 

State pension is less than the personal tax allowance so is not taxed, other pensions taking you over that and interest on savings over 1k a year is.