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Where Taxpayers and Advisers Meet

Too Much Tax

KillTax
Posts:2
Joined:Fri Feb 17, 2017 12:00 pm
Too Much Tax

Postby KillTax » Fri Feb 17, 2017 12:10 pm

In December I started getting state pension, I have also a works pension, I work 19 hours a week, tax man has started taking extra tax of about £140 from my works pension. How can I reduce this tax? Can I cut down my working hours?

TW1234
Posts:26
Joined:Sat Jan 07, 2017 11:42 am

Re: Too Much Tax

Postby TW1234 » Sat Feb 18, 2017 6:30 pm

Don't rush.
You need to look at the whole situation of your tax and compare your total previous gross income, the total tax charge and your total net income with your current situation.
It is likely that your your tax allowanceis now set afirstly gainst your state pension and any remaining allowance then set against your works pension. If that uses up your allowances, then your employment payments.no longer have any allowance against them so tax is taken on all the earnings.
When you were only receiving employment payments, then the allowances were all available against that single source of income.

JRG
Posts:424
Joined:Wed Feb 03, 2010 4:40 pm

Re: Too Much Tax

Postby JRG » Sat Feb 18, 2017 9:59 pm

If you are a basic rate taxpayer then the tax charged against your State Pension is, at the most, 20%, which means you are still getting at least 80% of your full State Pension.

If you cut down your working hours you'll save the 20% in tax you pay, but you'll lose the 80% in cash you're
paid. This means you'll lose four times more real money than the tax you'll save.

AnthonyR
Posts:322
Joined:Wed Feb 08, 2017 2:33 pm

Re: Too Much Tax

Postby AnthonyR » Sun Feb 19, 2017 1:45 pm

If you are a basic rate taxpayer then the tax charged against your State Pension is, at the most, 20%, which means you are still getting at least 80% of your full State Pension.

If you cut down your working hours you'll save the 20% in tax you pay, but you'll lose the 80% in cash you're
paid. This means you'll lose four times more real money than the tax you'll save.
Agreed - although this assumes that the right PAYE code is being operated. Assuming you are a basic rate taxpayer (income under ~£43,000) just double check with your works pension provider that they are using a BR code (basic rate) and not D0 (higher rate).
Anthony Rogers LLB CTA TEP
Fusion Partners LLP
anthony@fusionpartners.co.uk

KillTax
Posts:2
Joined:Fri Feb 17, 2017 12:00 pm

Re: Too Much Tax

Postby KillTax » Wed Feb 22, 2017 10:29 am

Thank you for the feed back, much appreciated.


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