Income Tax Demand

[chrissa1]

I am a pensioner and my only income last year was my State Pension + 3 small pensions which I receive, nett of tax.

I have received a Demand for £262.40. to be paid before 31st Jan 2014.

I rang the Tax Office and have been sent the figures they have for my Pension Income and to my calculations, they don't add up.

Should I pay the lower figure that I have calculated from these figures, or query the fact that all my income is received Nett of tax, being deducted already by my providers? Thanks.

[chrissa1]

Pension 1 - 112T WK1
Pension 2 - BR WK1
Pension 3 - 75L

The year before I was NT.

[boxtops]

That's interesting, chrissa - all my other pensions are BR but you have an allowance on one of yours.

[chrissa1]

Haven't I got an allowance on two, boxtops? Is that a good thing?

[boxtops]

It will all depend on your circumstances, chrissa, which only you can know - the ways it's working for me is that my paid job carries the tax allowance for both my job and my State Pension so the tax free allowance is very low, and I'm paying Basic Rate (BR) tax on the other income, so no allowances at all.

The taxman says if I'm paying too much or not enough, they'll sort it out at the end of the tax year when I get my various P60s.

[ubasses]

NT tax code means no tax to be paid on income or pensions. So if your income was over the allowance of £7575 for 2011/12 some of the tax demand may be for that period.

[chrissa1]

What is the point of giving someone an NT code for one year, if you are going to claw it back the following year?
I had to become bankrupt after my husband died in 2011.

[factor-fiction]

They may have not been aware of all your other pensions, Chrissa. Ideally it's best if exactly the right tax is deducted , but if that's not possible (and it is difficult when you have 4 sources of income) I'm not sure whether it's better to deduct too much then refund some or take too little then increase your code next year. I'm not sure that the bankruptcy issue affects anything here

[themas]

1. The NT code for 11-12 could be relevant. I assume the bankruptcy was after 6 Apl 11 in which case it was in the 11-12 tax year. All bankrupts are given an NT code for the tax year in which they become bankrupt & it results in any tax which is due being paid over to the Insolvency Service.

However, that doesn't mean you don't have to pay the tax. What it should have meant in your case was that the pensions (not the state pension) were paid to you without any tax being deducted, & any tax liability you had you were responsible for paying to your Official Receiver. If you didn't do that (probably because you didn't realise you had any liability) it is just possible HMRC are now collecting the 11-12 tax as well as any you owe for 12-13.

2. I assume the pension figures you have quoted are gross. You say tax is deducted at source (except for the state pension) so at least some of the total you owe for the year will already have been paid & should be deducted from ubasses calculation. If you quoted net figures can you please quote the gross (& the amount of tax already paid) as the calculation has to be based on them.

[chrissa1]

The Inland Revenue figures are:

Pay Tax. Tax Code
£1449. £72. BR WK1
£1329. £13.60. 112T WK1
£. 760. £. 0.20. 75L

My pensions were declared on my Statement of Affairs, Themas, so I assume the OR would have taken the tax if he thought it was substantial enough to make a difference to what I owed when becoming bankrupt. What I get is hardly a fortune.
Thanks for your interest.

[chrissa1]

Those figures looked so neat and tidy when I typed them.

[themas]

Assuming those Inland Rev. figures are correct then your gross income for 12-13 is £3538 plus state pension 13 x £476.60 (£6195.80) giving a total of £9733.80. Tax free allowance £8105 leaves £1628.80 taxed at 20% = £325.60. You have paid (again, if Inland Rev. figures are right) £85.80 so you owe £239.80 - a bit less than the £264 they want. You need to get a detailed calculation from them of how they have worked out their figure and check it thoroughly.

Whatever you owe, they should agree to collect it from your tax code over the next tax year (2014-15).

[chrissa1]

Thanks, Themas. I rang them this afternoon, (only had to wait 20 minutes).
They were very helpful said that if I rang them back with my three P60s they could check the amount. It looks like one of my providers have taken too little tax from me.

They said it could be sorted out over the next year, so not all bad.

Thank you everyone for your help