XFool wrote:Dod101 wrote:XFool wrote:Lootman wrote:So if you have salary or a non-state pension then you will have a PAYE code. But if all your income is dividends, capital gains, interest, state pension etc. then there is no PAYE code, and so a PAYE code would not help adjust for dividend income.
Can this be true? State pension is taxable so, if total income above personal tax allowance, it would be taxed - presumably usually via PAYE.
If you do have a non-state pension then all income tax, including any on SP, is taken from that - if on PAYE. Such is my understanding.
No. Lootman is correct. My State Pension is paid gross (they all are I think) and for me to pay any tax due I need to do a self assessment and pay the tax the following January for tax due to the previous 5 April.
Indeed it seems so: https://www.gov.uk/tax-on-pension/how-your-tax-is-paid
If the State Pension is your only income
You’re responsible for paying any tax you owe. Fill in and send a Self Assessment tax return if you owe anything.
I must be remembering how things were before The Boy George got his hands on them.
The State Pension is not my only income but it is nowadays almost my only taxable income. I am still a bit over the tax free allowance for another year or two yet in respect of dividends for shares held outside of my ISAs and my SIPP and that will not change much because there is a big capital gain tied up in the shares held in certificates and I need to judge whether it is worthwhile paying CGT or the dividend tax. The one being a one off hit and the other an ongoing one makes it a fine balance.
I submit a self assessment form online but the amount due either way is rather trivial and I do not really know why I need to. It is all automated online so I suppose it does not cost much for HMRC to collect my pittance.
Dod