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Where Taxpayers and Advisers Meet

Am I receiving the correct UK Pensions with Tax Code S418L

Joined:Thu Jul 08, 2021 1:09 am
Am I receiving the correct UK Pensions with Tax Code S418L

Postby Joesoap1952 » Fri Jul 09, 2021 3:40 am

Hi People,

Could some kind soul please help me out with my year 2021 -2022 UK Tax Deductions and
my UK PAYE Tax Code S418L.

I believe that I maybe paying the wrong income tax for year 2021-2022?

I punched-in my joint pensions years income into Money Saving Expert Income Tax Calculator, it came back that
my yearly income after tax should be £15,747/montly income £1,312
However, I'm currently averaging £1,254 a month and not as calculated by the above method!

My info, I'm a single Scottish male pensioner, aged 69, I live in Scotland, I pay no UK National Ins.
I have a company pension + a UK State Pension, I get my State Pension + Works Pension paid
to me monthly.

According to my UK Government Gateway Account statement my combined state/works 2021-2022 pensions will give me
a yearly income of £16,539

My tax free allowance is £12,639
This leaves me with £3,900 which is subject to income tax at 20 percent - £780/£65
a month, I will average after tax a monthly income of £1,254

I pay income tax on my works pension - Tax Code S418L, my last works pension statement - 18 June 2021, I
paid £70.25 pence tax on my June 21 income.

If I continue to pay monthly tax at the above rate I will have paid tax at a higher rate for year 2021 -2022, 12 x £70.25 = £843.

This is all very confusing to me, could someone please explain to me in simple terms that my monthly income is correct according
to my UK Government Gateway Account Statement?

Thank you ever so much.

Joined:Mon Nov 25, 2019 11:35 pm

Re: Am I receiving the correct UK Pensions with Tax Code S418L

Postby D&C » Mon Jul 12, 2021 9:33 pm

There are a few bits where you may be confused or need to clarify things.

Firstly DWP do not pay State Pension monthly. It can be paid 4 weekly so have you understated this in your calculations?

Secondly Scottish residents have a small (c£2k) 19% tax band which has to be used before 20% tax is charged.

"My tax free allowance is £12,639".

Presumably you mean your tax code allowances (before deductions) are £12,639. This is slightly more than the standard Personal Allowance - what has been included in your tax code to increase this from £12,570?

Have you looked at the make up of your tax code and checked if each element is correct?

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