A state pensioner ended up stuck on the wrong tax code paying more tax then they needed to. The individual got in touch with HMRC over X to ask for help in correcting the issue.
They said: “Do I have to wait until next tax year for my tax code to be changed? I’m receiving state pension and small private pension but paying higher rate tax on the private pensions.”
HMRC asked if their tax code had changed since they started claiming their state pension and they confirmed it had.
The pensioner further explained their situation, saying: “The state pension isn’t being taxed but because I was also employed, it pushed me into 40 percent rate.
“I stopped being employed last month so now fully retired but stuck paying 40 percent on the small private pensions.”
A person pays income tax at the higher rate of 40 percent on income above £50,271 a year, with the basic rate applying for income between £12,571 and £50,270. They were then asked what tax code was applying to their pension, and they said it was CD0.
HMRC then suggested the pensioner might be able to solve the issue by setting up a personal tax account.
It said: “If you have already set one up, you would find the user ID in your email. Use the words ‘Government Gateway user ID’ to search your inbox and any folders you’ve created.”
The person said they had done this and they were then asked if they had been able to sign in to their personal tax account or use the HMRC app.
They responded: “I already have the app but it isn’t clear how to get a change to my tax code so I phoned HMRC – quite a long wait but I got through eventually. Hopefully they will make the change to my tax code soon.”
