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Ask Your Own Question, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 6097
Experience:  FCCA - over 40 years experience as a qualified accountant (UK based Practitioner)
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If I retire on 31st March 2020, aged 64 and take my lump sum

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Good Evening, if I retire on 31st March 2020 , aged 64 and take my lump sum with a pension of approx £1,000 per month and return to work part time, possibly 25 hours per week and earn £153 per day would I continue to pay tax once I reach personal threshold and then normal rate of tax ? Thanks Lix
JA: Which tax year are you filing for?
Customer: my retirement period would begin 1st April 2020 and my part time work would then begin, so would that not be 2020.2021 tax period?
JA: Anything else you want the Accountant to know before I connect you?
Customer: nothing for now, thanks

Hello and welcome to JustAnswer. I am here to help you. I am reviewing your question and will respond to you shortly.
Many thanks

Thank you for your question.

Your earnings from all sources are aggregated and you claim your tax free personal allowance against this total income. Any income over and above the personal tax free allowance would be chargeable to income tax at basic rate.

Both pension and part time income are taxable earnings.

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 3 months ago.
Thank you.What happens if I decide to take a higher lump sum which would be approx £62,000, do I require to pay any tax on that?If my combined earnings were , two examples £30,000 and £42000 how much tax would I pay in total? Thank you Liz
Customer: replied 3 months ago.
I do not wish to call , happy with emailing. Thank you. Liz

Thank you for your reply.

You can take 25% of your pension pot as cash lump sum and this would be tax free. If you were to take an amount higher than that, amount in excess of 25% value would be chargeable to income tax at your marginal rate.

Based on current tax year personal allowance and tax rates tax payable would be as follows

Combined earnings £30,000 Tax due £3,500

Combined earnings £42,000 Tax due £5,900

I hope this is helpful and answers your question. and other Tax Specialists are ready to help you
Customer: replied 3 months ago.
Many thanks, ***** ***** Thanks Liz

I thank you for your good words and for accepting my answer.

Best wishes.