How does PAYE work for retired Person?

Guest007 Registered Posts: 54 💫 🐯 💫
Gentleman gets pension and works full time.

HMRC has given him BR code for PAYE.

Can somebody explain this to me please?

Thank you.


    BCASL Registered Posts: 64 💫 🐯 💫
    Assuming state pension, chances are that the pension will have used up all or most of his allowances, but are not taxed at source, which is why all of his PAYE income will be taxed.
  • payrollpro
    payrollpro Registered, FMAAT Posts: 427 Dedicated contributor 🌟 🐵 🌟
    Just to expand on this a bit. Pensioners have to recognise that all sources of income are liable for income tax, including the state allowances for basic pension, graduated pension, SERPS and S2P. The problem comes from the fact that, irritatingly, DWP do not have the facility to assess and deduct income tax from the basic and additional state allowances.

    This means private pensions and any continuing earnings have to be over taxed in order to collect the tax due on them and the state allowances as well.

    The trick is to get in fast and make sure allowances are spread around in order to maximise net income and minimise the amount of refund to be claimed at year end, or less commonly any additional tax due.

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