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Sam, Accountant
Category: Tax
Satisfied Customers: 7544
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I live in Spain and have just received notification of my new

Customer Question

I live in Spain and have just received notification of my new tax code, which is 1060L. In the same communication it states that if my yearly earnings are less than £27.820 I may be paying too much tax. My earnings are around £24.000 p.a. how do I stand? All my income is from Police retirement pensions and UK old age pension.
Submitted: 3 years ago.
Category: Tax
Expert:  TonyTax replied 3 years ago.

Can you tell me in which year you were born please.
Customer: replied 3 years ago.

I was born in 1940

Expert:  TonyTax replied 3 years ago.

Leave this with me while I draft my answer.
Expert:  TonyTax replied 3 years ago.

I'm back.

As you were born after 5 April 1938 and before 6 April 1948, you are entitled to a personal allowance of £10,500. Howeever, if your income which is chargeable to UK tax which in your case will only be your police pension is more than £27,000, you will lose £1 for every £2 of income over £27,000 until you are left with a basic personal allowance of £10,000.

You should be on a tax code of 1050L (£10,500) as your income tax able in the UK is no more than £27,000. That isn't much different from £1060L which you appear to be on. I cannot explain where the figure of £27,820 comes from as the allowances and thresholds are quite clearly set out here. You might call the tax office and ask them to clarify that.

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