Tax deductions, has something changed?
Discussion
Being a retired old giffer my understanding of how tax was deducted under PAYE was that HMRC took account of your income, state and private pension(s) calculated and tax code and then deductions were made by the provider of your main pension. Other pensions were paid without deduction.
This month the one minor pension I have has suddenly started deducting tax based on code BR. This month payment from the main pension and deductions are unchanged. Though HMRC have just written to say I've paid too much and have to claim online.
Is this a change in the system or a cock up by the pension admin or HMRC?
This month the one minor pension I have has suddenly started deducting tax based on code BR. This month payment from the main pension and deductions are unchanged. Though HMRC have just written to say I've paid too much and have to claim online.
Is this a change in the system or a cock up by the pension admin or HMRC?
BR is the "Emergency" tax code, used when the payroll/pension provider doesn't have your actual PAYE code for some reason.
Could be they've moved to a new system and neglected to migrate the codes. Seems unlikely to be a HMRC mistake, unless you just got a new source of income and it's made everything go a bit wrong.
If you had said it was a "K" code then I'd have said it was down to too much savings interest etc. and HMRC trying to claw back tax, but a BR code ... I think pension provider.
Could be they've moved to a new system and neglected to migrate the codes. Seems unlikely to be a HMRC mistake, unless you just got a new source of income and it's made everything go a bit wrong.
If you had said it was a "K" code then I'd have said it was down to too much savings interest etc. and HMRC trying to claw back tax, but a BR code ... I think pension provider.
BR simply means"basic rate", i.e. 20%
Normally, your tax free allowance (£12,570) is set against your stare pension (because DWP won't / can't operate PAYE against it).
Any balance left over is then set against your main / biggest occupational pension.
If there's any other income sources, then they are liable at 20% - or "BR".
So if the OP has two occupational pensions (or an occupational pension + a job), then it's taxable at 20%(assuming of course the total income isn' sufficient to incur a 40% charge -then it gets awkward).
Normally, your tax free allowance (£12,570) is set against your stare pension (because DWP won't / can't operate PAYE against it).
Any balance left over is then set against your main / biggest occupational pension.
If there's any other income sources, then they are liable at 20% - or "BR".
So if the OP has two occupational pensions (or an occupational pension + a job), then it's taxable at 20%(assuming of course the total income isn' sufficient to incur a 40% charge -then it gets awkward).
Ok figured it out. Partly it's my fault for ignoring things as it's such a trivial amount in the overall scheme back from a short 1970's employment.
It's also down to a change of provider, insurance buyout, they're reporting things in a completely different way, on top of which is all coupled with an additional share of surplus that has been a long time in calculation.
All works out correctly.
The overpayment to HMRC is not unexpected, I was being charged for being over the allowance on savings when already taken steps to deal with it. Was going to get it corrected if HMRC didn't take steps, but seems they're more on the ball than I am.
It's also down to a change of provider, insurance buyout, they're reporting things in a completely different way, on top of which is all coupled with an additional share of surplus that has been a long time in calculation.
All works out correctly.
The overpayment to HMRC is not unexpected, I was being charged for being over the allowance on savings when already taken steps to deal with it. Was going to get it corrected if HMRC didn't take steps, but seems they're more on the ball than I am.
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