Tax code changes

[tractorboy2]

Hi RobertT

Personal Allowance 12570
Less Untaxed Interest 3104

Strangely my amount owned was excellently the same, did you receive a payment when the share save ceased?

No I didn't have share save. My actual untaxed interest was approximately £1k more , which is why I said above that my personal allowance had been used. Judging by what I've read (quoted above it's more likely some of my starting rate that has been deducted first).

I received the share pay out earlier this year but that should be tax free anyway.

[tractorboy2]

The guy I spoke to told me I still wouldn't pay any tax this year. I tried explaining that my pension will increase in April and again in November and I would be liable for some tax with the codes I have been given. I also told him that my savings interest would be lower and that the interest I had been paid so far this year is all the interest I would receive.He pretty much said they can't do anything about that till next November when they get notified by the bank (and anyone else that paid you).

Looks like I'm going to have fun next year , I'm going to have to change my earnings in April and again in November
As I am due my age65 benefits next November does anyone know if the current statement figures are increased the same amount as pension already being paid ?
I want to try and work out what income I will receive 26/27.

Do you have a personal tax account online? You can update that to show expected income sources and amounts.

Yes I do. I plan to do that in April.

Update on this , I used the Government Gateway and changed my estimated income to account for the pension increase , and have now had my personal allowance increased to account for it , and therefore should be free of tax. I wonder how they'll refund the tax I've already paid this year which was round £15.

I will have to update it again in November when I know how much I will get from my age65 benefits.

[RobertT]

The same happened to me, although I didn't realise it at the time this thread was started.

My income for tax purposes is what I draw down from my SIPP.
HMRC had decreased my tax code for no logical reason and so I paid tax when I shouldn't have done.

Luckily I noticed quickly and was able to change my expected income to the correct amount, and I got the tax I'd wrongly paid refunded the following month via my pension provider.

I've since got into the habit of checking every month on the HMRC app, to make sure everything is how it should be.

[tractorboy2]

What I would like to know , is why do they not use all the personal allowance ?
They just give you a tax code to cover the income (if it's less than 12570).

[RobertT]

I believe it increases the amount you can earn in interest tax free from non ISA savings.

People with income between £17,571 - £50,270 can earn £1,000 per year from savings interest before they pay tax. An income of over that and it reduces to £500 tax free.

If you earn less than £17,570, you also qualify for the starting rate of tax on interest which can give you up to another £5,000 tax free. Which is worked out on a sliding scale with income between £12,570 - £17,570.

If your income is below the level of the personal tax allowance(£12,570), you can earn even more tax free interest by however much your income is under that amount.
So someone with an income from wages or pension of £10,570 for example, can earn a total of £8,000 in interest tax free from non ISA savings.

Basic rate taxpayers currently pay tax at 20% on any interest over their individual allowance, and higher rate taxpayers pay 40%.
Those rates are being increased to 22% and 42% from April 2027.

More info: https://www.moneyhelper.org.uk/en/savin ... nvestments