Every month we send information to HM Revenue and Customs (HMRC). They review your tax code. They issue a revised tax code if they believe it needs updating. The tax code is electronically downloaded to your pension pay record.
Your personal allowance for tax-free pay is split across all incomes. Your incomes include pensions, employment and property rental. State pension and property rental income is not taxed at source. The tax on these is collected through your other pensions and employments.
If we do not receive a P45
We must use tax code 0T (month 1) if tax information such as a P45 is not received for new pension payments. This means that there is no tax-free pay allowed and you pay tax on all pay received. The ‘month 1’ part means that each month is taxed individually. Previous pay received and tax deducted is not taken into consideration.
If we receive a P45
If we receive a P45 that can be used, we apply the P45 tax code on a month 1 basis. This means that if a tax refund is due it is not paid with your pension payment at that time.
Who to contact about your tax code
We do not have authority to amend your tax code. A tax code change must come from HMRC. If you think your tax code is incorrect on your local government pension, you must contact the tax office:
- write to HMRC, Pay As You Earn, BX9 1AS
- call 0300 200 3300 or textphone 0300 200 3319. If you are calling from abroad, call +44 135 535 9022.
Please quote the tax reference 663/KP and your National Insurance number.