Tax Codes

[smiffy65]

today my husband received his new tax code, he is a pensioner, his tax code went down to 264p does that mean he will pay more or less tax,, thanks in advance

[furrypusscat]

The lower the code, the more tax will be payable.

[Calibax]

If the tax code has gone down then he will pay more tax. The number indicates the amount of free pay you get (approx. divided by 10) so 264P means he can earn £2,640 before he starts to pay tax.

[furrypusscat]

Does he have different income, ie more than one pension whereby his code may have been split up to cover them.

[smiffy65]

I thought that the codes for pensioners ending with p meant the lower the code the lower the tax

[Canary42]

Furry and Calibax are correct.

See here for confirmation (the P merely identifies a Pensioner eligible for full Personal Allowance)

http://www.hmrc.gov.uk/incometax/codes-basics.htm

[Calibax]

No, all tax codes with a suffix letter work the same way and indicate how much free pay you are allowed. P just indicates a pensioner 65 to 74

[New Judge]

No smiffy. As calibax has explained the tax code indicates how much income is free of tax, so the lower the tax code the less tax free income there will be. The 'P' suffix indicates that the person is entitled to the higher allowance for people os State retirement age. (This allowance is to be phased out).

Most pensioners' tax codes will change when the State Pension changes, though the increased personal allowance will usually offset any increase to the State Pension. (The State Pension is paid tax free but forms part of your taxable income and the tax code is adjusted to reflect this).

Difficult to say why your husband's code has gone down without further details.

[factor-fiction]

It seems likely to me that your husband has other income from a company pension/private pension. The tax due depends on the combined earnings from the state pension (which is paid without a deduction for tax) and any other pensions plus any other income and finally any allowances. The allowance will be applied to his private pension and will take account of his state pension earnings.

[Peter Pedant]

They may be getting some unpaid tax from this year (just about to end).

Otherwise as above - he has more than one source of income besides his pension.

but the rest of the letter should tell you what they have knocked off from his basic amount and why