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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15977
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Tax on Pension versus Part Time Job

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I was a Police Officer who was medically retired on 21/04/14. I receive an annual pension of £9354. Currently I am below the tax threshold of £10,000. I was considering taking a Christmas Retail Temp Job which would be around 16hrs per week for approx. 10 weeks at approx. £7.00 per hour. What I would like is for my pension still to remain my tax free allowance and the money I earn from the temp. job to be taxed. What I don't want to happen is that January to March 2015 my small pension is also taxed dropping my monthly income. I am a married woman of 42 and I live in England. What can you advise?


When you start the job, the retail employer will automatically register you as an employee with HMRC. It's possible that the tax office will allocate some of your personal allowance to the new source of income though the rule of thumb is that the personal allowance usually stays with a pension as that is likely to be paid for the rest of your life.

You could ask the payroll people at the new employer to put you on a BR code whereby they will deduct tax at 20% and the tax code on your Police pension may be left alone. Alternatively, on the day you start, ask for the PAYE reference for the new employer, call the tax office on the number here and ask them to make a note that you would like a BR tax code issued on the new job as it is only seasonal and that under no circumstances do you want your main tax code messed with.

If all goes to plan, at the end of the tax year, you may be overpaid as some of your personal allowance will have been unused so you can ask the tax office to review your liability for the year and to repay any overpaid tax.

If you find that some of your personal allowance has been used against the retail job, call the tax office and have a BR code issued at that point.

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