Wildly incorrect tax code !!!

[gbb]

Anyone had similar and suggest the route to get it corrected
Retired last year, did draw a lump sum on some pension pot so that would have skewed my income but even then, I think that was two years ago.
Anyway, my projected income is ridiculous, over £200k...Hahaha
Tax allowance shows as MINUS £20k ish

I've read and read the HMRC page but cannot see how to challenge this .. any ideas out there

 

[Regular.Cyclist]

Phone them up and talk to them. I have found them to be very helpful in a proper conversation.

 

[fossyant]

Call them and explain.

 

[bikingdad90]

Register for a GOV.UK account and you can change your estimated income and deductions for the tax year under the PAYE bit. They have upgraded the system so there is now more functionality.

 

[gbb]

Register for a GOV.UK account and you can change your estimated income and deductions for the tax year under the PAYE bit. They have upgraded the system so there is now more functionality.

Yeah i had a look at that (i think) and while they ask expected income and are you retired or not...does pension count as income ?
Entered values and it the overall expected tax take will be around 40%...on just my state pension and savings interest.
Gonna ring them Monday, found the number.
I didnt know if there was an organisation that'd know about these things, as said, former dealings with government depts tend to get very very convoluted IME. But perhaps things have changed...

 

[Big John]

I used to get folks come up to me when I was working (now retired) and ask why their pay had changed so much that month. I did the salaries so folks automatically thought it was my fault. So I'd check to make sure I'd got the right tax code and sure enough there'd been a change and they'd been put on a K code, effectively meaning everything was being taxed. I'd tell them that it was down to their tax code and they'd asked me why I'd changed it. I said I changed it because that's the law. If I'm given a new code to use by HMRC then I have to use it. Every time I told them it's up to them to sort it out because HMRC will only speak to the person themself and not the personnel guy I.e. me. HMRC is your only port of call. Find a phone number, ring it. They used to be excellent as well as fairly quick to answer the phone. Obviously they'll need personal details, NI number, etc. you already should have had confirmation in the post of your tax code change. That, if I remember right, explains how it was arrived at.

 

[gom]

I agree with above that HMRC website and actual person if you ring up are helpful. I have 4 employer pensions as well as state started last year. When I first retired and needed to start looking into this I was expecting a nightmare, but it all turned out very easy. K code had me puzzled when I got my first one, but again was all easy to check and found to be OK.
When I started my first pensions the codes were wrong and I was paying too much, but I changed my estimated income on the website and it was soon fixed. 👍🏻👍🏻

 

[gbb]

Yes, im on a K code.
I could do it via the app just not sure if to put my state pension as 'income '.. which it is of course but I did it anyway but the rest of the calculations still seem all off whack.
If it wasnt obvious..im crap at this kind of thing
Ringing on Monday,

 

[chris-suffolk]

They got mine wrong last year - there's a facility to change your projected income, and that then recalculates your tax code - or it did for me. Did it all on-line.

 

[Big John]

Tax codes make a difference to your pay and therefore they're important. Folks at work never gave them a moments thought. They'd get notified by post and stick it in a drawer. I'd get their new tax code direct from HMRC via some 'portal' and update the payroll. As we were a small company then, around 35 people, if I saw a K code I'd contact the individual and tell them what difference that code would make to their pay packet and to contact HMRC direct. I wouldn't have been able to do that, of course, if we'd had a much bigger payroll.

Also worth noting that if you get a new code that's advantageous to you and you don't think it's right then let them know ASAP. I know it's nice to get more money, and it WAS their mistake after all, but they always discover the error eventually and either recoup the overpayment in one hit (ouch) or they change your code to be disadvantageous so they claw the overpayment back over time (ouch but a less painful ouch).

 

[Aescott]

Pension counts as income for tax purposes, but NI doesn't apply.

 

[bikingdad90]

I think @gbb is referring to state pension.

The pension is paid gross and is classed as taxable income but because they adjust your tax code, any tax due on it comes out of other income sources which are taxed and paid net making it hard to look at one source of income in isolation and work out if it is taxed correctly or not.

 

[midlife]

I think @gbb is referring to state pension.

The pension is paid gross and is classed as taxable income but because they adjust your tax code, any tax due on it comes out of other income sources which are taxed and paid net making it hard to look at one source of income in isolation and work out if it is taxed correctly or not.

Yep, tax code is such that sinceI started to draw my state pension an extra 400 quid or so a month comes out of my salary at work (I work full time still)

 

[Ming the Merciless]

Party at your mansion?

 

[midlife]

Does a 3 bed house count as a mansion? Party Seven maybe .