I hope I’m posting in the correct forum.
I write on behalf of my great-uncle who is approaching 85.
My uncle’s taxable income is made up of the state pension and a small annuity. In the 2021-22 financial year his state pension will amount to £17,514 and the annuity is £6724. His income from interest on savings is now too small to be taxed.
The state pension exceeds my uncle’s personal allowance of £12570 so the difference of £4944 is added to the annuity to give a taxable figure of £11667. Tax is paid to HMRC by his pension firm at the basic rate of 20%.
My uncle’s tax code for 2020-21 was K478. His annuity was paid at £368.71 per month after tax. How much will his net monthly annuity payment be when K493 is applied?
The reason for my query is the pension company has made a hash of paying the annuity on time and taxed correctly for several months. My uncle’s next-of-kin has struggled with the issue by phone and letter but my uncle still doesn’t know when to expect a payment and how much. How the firm will deal with the new code is anyone’s guess. A formal complain to the pensions ombudsman looks probable.
Thank you for any help.
Afonso
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