Tax On Job And Pension

[kh70]

My father has a private pension (from old employer) which he receives each month and gets taxed on. He now has a new job and is on emergany tax code BR for that.

I assume that the the BR code is because HMRC are treating this as a second job.

Is this correct? Are his allowances for 2013/14 9940 been used against the pension first?

Help anybody?!

[Kathyan]

My husband left the army a couple of years ago. He was given the BR code for his pension and a normal code for his wages. But they also added his army wages (which he had stopped getting) so one week he paid nearly all his wages in tax! This year they have split his allownace btween his pension and wages. I would urge your father to check anything he gets from HMRC very carefully!

[bhg481]

As far as HMRC are concerned pension and wages are all income. If there are two sources of income HMRC will allocate his tax-free allowance to one of them and he'll pay tax on all of his other income. This means he will have a tax-code for each company sending him money; one will include his allowances and the other will be the "emergency" code that means he pays tax on all the earning from that source. It doesn't matter which source gets the tax relief providing that the income from that one s greater than his allowance.

[EDDIE51]

This should sort itself out once he gets a proper tax code for his new job, he will get a refund of the overpayment.

[EDDIE51]

Sorry , if his pension is so high that it uses all his tax allowance of £9950 a year for 2013/14 then all extra income will be taxed at the maximum rate. Pension and wages are all income as far as tax is concerned.

[factor-fiction]

You asked :" Are his allowances for 2013/14 9940 been used against the pension first? "
It depends what his tax code is for his pension, and whether his pension income is above or below the personal allowance. If his pension exceeds the personal allowance then he will taxed at basic rate on his new job. If his pension income is less than his personal allowance then he will be due a rebate at the end of each tax year and should consider asking for his tax code to be split between jobs or applied to the new job if that salary is more than his pension