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TonyTax
TonyTax, Tax Consultant
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I BECAME A PENSIONER ON MAY 30th BUT HAVE DECIDED TO CARRY

Resolved Question:

I BECAME A PENSIONER ON MAY 30th BUT HAVE DECIDED TO CARRY ON WORKING FOR THE TIME BEING WHILST CLAIMING MY STATE PENSION MY TAX CODE HAS CHANGED THIS WEEK FROM 1060L TO 138L SO THIS WEEK OUT OF £488 TOP LINE I RECIEVED ONLY £244 WHICH IS ONLY HALF WILL THIS BE MY WAGE FROM NOW ON OR IS IT JUST CATCH UP TO PA THE THREE WEEKS SINCE MY 65th BIRTHDAY IAN
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.

Hi.

Can you tell me what your weekly rate of state pension is and confirm that started on 30 May. What is your annual salary? Do you get paid weekly in your job? Can you tell me what the gross pay and tax to date was as shown on the last payslip the 1060L tax code was operated on please. Does the 138L code have W1 or M1 after the 138L?

Customer: replied 1 year ago.

weekly state pension is £177.31 from the 5th june my annual salary is £25.376 paid weekly total gross pay to date 11/06/2015 is£4.873.90 on code 1060L new code is simply 138L nothing else

Expert:  TonyTax replied 1 year ago.
Thanks.

Can you tell me what the tax to date figure on the 11 June payslip is please.
Expert:  TonyTax replied 1 year ago.
Hi again.

I asked for the tax to date figure so that I could work out your new tax position on code 138L. However, the reason your code has changed is because you are receiving state pension. State Pension is paid gross but it is taxable income and HMRC have changed your code so that the tax on your state pension is collected via an increase in the tax deduction from your salary.

As you are receiving £177.31 per week, the tax deduction from your salary should increase by £35.46 per week (£177.31 @ 20%).

Your tax code has changed from 1060L (£10,600) to 138L (£1,380 to £1,389). That's a reduction of £9,220 to £9,229 in your allowances. £9,220 is what you would receive in state pension in a full tax year but as you were 65 on 30 May, you won't receive that much so you should call the tax office on the number here and have your tax code reviewed and changed while you are on the phone to them. I know the wait times are too long but phoning is the quickest way to have the code changed. Try calling at 8am as soon as the tax office call centres open.

I hope this helps but let me know if you have any further questions.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15882
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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