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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3819
Experience:  FCCA FCMA CGMA ACIS
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I currently have two tax codes. The first is on a military

Customer Question

I currently have two tax codes. The first is on a military pension of £14,422.50 which has just changed to 1000L. The second is on my work income of £26,174, which is BR. Can you please explain why I have two codes and if there is any benefit to have the codes swapped over - if that is possible?
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question. You are talking with an ex AGC(SPS) Major who was RAPC before that.

Your tax treatment is perfectly normal. HMRC usually apply your tax code to your military pension, the code number of 1000 is the correct personal allowance for tax year 14/15. Assuming your military pension exceeds 10K annually you will receive the benefit of your personal allowance through the medium of that pension being taxed.

Thus you have no personal allowance left to set against your work income which is taxed fully at 20%, that's what a tax code BR means. You can certainly ask HMRC to have the personal allowance swapped over, but quite frankly, what is the point? You may well be operating through 2 tax offices, Ty Glas Road, Cardiff for your military pension and your works local tax office for the balance. You see how complex it can get if you try to buck the tried and tested HMRC system; it actually works!

The situation is slightly different if your military pension is under 10K. Then not all of your personal allowance will be used and your work tax code will need to be inflated to give you the full benefit of your allowance. You need to check this out.

I do hope I have been able to throw some light on your question.
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Customer: replied 3 years ago.

Thanks Keith

Expert:  bigduckontax replied 3 years ago.
Thank you for your support.

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