I'm trying to produce an emergency tax calculator. A lot of pension providers have decided that they will need to apply an emergency code (1060 Month 1) on lump sums taken from a pot, where there is no existing code, P45 etc. That can have a big effect on the immediate sum paid out and force people to apply for a refund or wait until the next year for an automatic repayment.
I’ve got the basic calculator done (Have a look at http://tinyurl.com/ng599lr but I’m having a real problem getting definitive answers to a couple of questions. I wondered if someone here might know them?
a) If the amount goes over £100,000 (or the 1/12th equivalent) does the allowance reduce?
b) If the amount is below £10,000 (small pot) is it taxed at a fixed 20% rather than annualised?
I’ve had little joy with the HMRC help line or their web pages and I haven’t tracked it down in the technical guide either.
Thanks, Gareth Morgan