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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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We have just withdrawn 47k from our pension pot and

Customer Question

Hello, we have just withdrawn 47k from our pension pot and 19,600 was taken out in tax. Our earnings last year were £21,074 from work and £10,000 pensions. I thought that our tax allowance of £10,600 enabled us to earn£42, 385 before the forty per cent kicked. Consequently we calculated that £11,311 of our pension pot would be at 20% totalling £2,262 and £35,689 would be at 40% totalling £14,276
In total we estimated the tax to be £16,538 rather than £19,600
Is this right please?
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
Whether the tax deduction was correct or not really does not alter the price of cheese to quote my old boss. If too much has been taken off, then it will correct itself when you make your annual self assessment tax return. The tax deducted appears to be a tad over 40%.
Your 15/16 tax position would be of the order of:
21074 + 10000 + (47000 @ 75%) - 10600 = 55724 of which 31865 is taxed at 20% (6373) and the balance 23854 @ 40% (9543) total tax due 15917 [rounded figures].
You would appear to have overestimated by some 500 quid, better than a poke in the eye with a sharp stick. I do hope that helps.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3371
Experience: FCCA FCMA CGMA ACIS
bigduckontax and 2 other Tax Specialists are ready to help you
Expert:  bigduckontax replied 1 year ago.
Thank you for your support.
Customer: replied 1 year ago.
Hello, I sent a follow up question. Are you able to deal with this?
Expert:  bigduckontax replied 1 year ago.
Yes, but I am just off to take my cat to the vet, back in about an hour I estimate.
Customer: replied 1 year ago.
Hello, I am looking at your figures again and you appear to have totalled our income and pension pot withdrawal which is £21,074 plus £10,000 plus £47,000 which totals £77,074 - £10,600 totalling £66.474 but you have put £55,724 so I am not sure whether you have calculated this wrong. I am also unsure as to why we have to add all money together when we have paid our tax on the £31,074. Also, we do not fill in self-assessment tax returns as they are taxed at source.

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