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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15885
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I am to receive£ 24463 trivial commute next month ,tax looks

Customer Question

I am to receive£ 24463 trivial commute next month ,tax looks like it will be £10000 on that at the basic rate .I have not worked or paid tax since aged 40 in 1982 .will I get tax back
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. Let me take a look at that and I'll get back to you.
Customer: replied 1 year ago.
ok its just one question don't want to get involved with anything else
Customer: replied 1 year ago.
how long will you be its pretty straightforward I should think;;.first 2650 at 20 per cent next 12500 at 40 per cent then last 9313 at 45 per cent
Customer: replied 1 year ago.
diago pensions will send me p 45 is this a one way conversation ??
Expert:  TonyTax replied 1 year ago.
No. I'm drafting my answer.
Customer: replied 1 year ago.
ok sorry not gonna pay another sum to phone cos I am deaf
Expert:  TonyTax replied 1 year ago.
No need for a phone call.
Expert:  TonyTax replied 1 year ago.
In order to claim a repayment, complete a P53 which you can find here and send that and your P45 to HMRC. The P53 is here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/497759/P53_01_16_V1.0.pdf I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.
already knew that so wasted my money ,wanted to know more than that
Customer: replied 1 year ago.
thought you would have put more detail into how much tax I could get back my cat could have told me what you have .but never mind thanks for trying
Expert:  TonyTax replied 1 year ago.
How much tax will be deducted?
Expert:  TonyTax replied 1 year ago.
You asked if you will get tax back not how much. I need to know your date of birth, how much state pension and disability payment you get to work that out.
Expert:  TonyTax replied 1 year ago.
If you have a problem with an answer, let me know before you rate as that reflects on me. I've worked hard on here for nearly 8 years and have over 8,000 acceptances and have been working in tax since 1979. Most people ask for more information instead of trashing an answer and insulting the experts. People have different levels of state pension so if you need figures, you might give all the information I need to do the calculations. I'm not a mind reader.
Expert:  TonyTax replied 1 year ago.
While I was drafting my answer, you were making further posts which I didn't see until i had posted my answer. I don't always draft my answers in the dialogue box. Before I could respond you had rated negatively. That's not how I would behave if I asked a question here.
Customer: replied 1 year ago.
date of birth 5/6 1942 state pension £140 per week dla high motability not sure how much cos I have a motability car ,low care £87 per month this is non taxable ,sorry to offend you I'm getting on and have pensioner moments
Customer: replied 1 year ago.
that is all my income
Expert:  TonyTax replied 1 year ago.
I have those moments too. Age beats all of us. Have the pension company told you how much tax will be deducted from the trivial commutation and how much will be tax free? The tax free element should be £25%.
Customer: replied 1 year ago.
dla help with getting around is £57-45 a week this is paid in exchange for a motability car
amount of tax is first 2650 @20per cent;next 12500 is 40 per cent ;final 9313 is 45 per cent tax I understand this is the format at basic rate I have tried to work it out and it comes at 9/.10 ,000 I will amend your rating now we are cooking
Expert:  TonyTax replied 1 year ago.
You should get 25% of the commutation as a tax free lumps sum which will leave £18,347 taxable. Your state pension is £7,280 per annum so you have £3,320 (£10,600 - £7,280) of unused personal allowance which will reduce the £18,347 to £15,027. Tax on that at 20% will be £3,005.40. If the pension payer deducts £9,720.85, you will be due a repayment of £6,715.45.
Expert:  TonyTax replied 1 year ago.
DLA is not taxable as you will see here. If you are given 25% tax free, you will suffer tax on £18,347 which will be £6,968.65 and will be due a repayment of £3,963.35. They may only deduct 20% tax on the taxable part which would be £3,669.40 and that would mean you would be due a tax repayment of £664.00.
Expert:  TonyTax replied 1 year ago.
You might ask the pension payer what tax code they will use. If they intend to use a BR (basic rate) code, that will deduct tax at 20% on the taxable part of £18,347. If they intend to use an 0T M1 code, that will result in a deduction of £6,968.65 on the taxable part of the commutation using the method you outlined earlier from your own research.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15885
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
TonyTax and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
ok thank you broadly what I expect but asked about the 25 per cent tax free and pension provider says doesn't apply to me .never mind thank for your help its a minefield but plod on ;I will amend your rating now and apologise for my ill manners .steve gladwin
Expert:  TonyTax replied 1 year ago.
No problem. Thanks for giving me the chance to give you more information.
Did the pension provider tell you why you aren't entitled to the 25% tax free?
Customer: replied 1 year ago.
something to do with I was already receiving pension and 25 per cent applied to ones who were not receiving yet .gotta go to doctors now take care
Expert:  TonyTax replied 1 year ago.
The 25% tax free sum should apply to every pension you have.
Customer: replied 1 year ago.
Thank you for your e-mails,I will arrange for payroll to issue you with a P45 once the payment has been made (6th March 2015).As you were already in receipt of your pension you do not qualify for an part of the payment being tax free.The 25% tax free only applied to members who are not in receipt of their pension.I hope this help, if anything else comes to mind please just ask. Also if you need any help with the forms give me a call.Kind RegardsAmandaAmanda Jane Pennycook
Senior Pensions Systems Administrator
Diageo Pensions
Edinburgh Park
*****
got this from my pension provider
Expert:  TonyTax replied 1 year ago.
That suggests that the pension you are commuting was already paying out an income in which case the pension company is correct. I'm surprised that they allowed you to commute.

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