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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15946
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Please can you advise me I have received my pay coding from

Resolved Question:

Please can you advise me I have received my pay coding from HMRC for year 15/16 with a tax free allowance of £10600 HMRC has deducted the whole amount of my State Pension as tax is it not subjected to basic rate of tax.
Regards
Ian
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.

Your state pension is paid to you without deduction of tax at source but it is taxable income as you will read here.

In order to collect the correct amount of tax over the year on all your income sources, HMRC allocate a sum out of your personal allowance equivalent to your state pension to cover it. The effect of this is that you then pay more tax on your occupational or private pension as it has less of your personal allowances allocated to it.

I hope this clarifies matters but let me know if you have any further questions.
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