Tax Rebates & Refunds

Advice on tax for people approaching retirement

August 31, 2012
Posted in Other Tax — Written by Geoffrey

Anyone who is approaching retirement will need to ensure that they are meeting all of their obligations in relation to income tax. The following advice and information should help to make things clearer:

• People at State Pension age no longer have to make National Insurance contributions. However, you don’t automatically stop paying income tax when you reach retirement.

• You will still have to pay tax if your taxable income (which includes your State Pension) is more than your personal tax-free allowance

• HMRC may contact you or send you a P161 Age-related Personal Allowance form to fill in when you reach retirement age

• If you haven’t heard from HMRC and you’re within a month of reaching State Pension age, you should get in touch with HMRC to sort out your income tax affairs

• To work out if you are a taxpayer, you need to add up your taxable income and work out your tax-free allowances. Then, you need to deduct your allowances from your income. This will help you to work out whether you need to pay income tax or not.

• If you pay too much tax on your pension, you can still claim tax rebates just the same as when you are claiming for overpaying tax in your job.

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