Below are a number of common questions answered.
N.B. The information on this page is based on Just Retirement’s understanding of current HMRC processes in April 2013 and is subject to change.
Why are you taking tax off my annuity payments?How much tax will I pay?Who should I contact regarding taxation?How do I change my tax code?I live abroad, so why am I paying UK Tax?Will I receive an annual statement (a P60)?I have paid too much or too little tax, how do I correct this?I have received a notification that my tax code has changed; how will this affect me?Where can I find more information?
Your pension annuity or fixed term annuity payments are treated as pension income under Her Majesty’s Revenue & Customs (HMRC) Pay As You Earn (PAYE) tax regime. When you take out a pension annuity, HMRC tells Just Retirement which tax code to apply to your income. This tax code determines how much tax is to be deducted.
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This will depend on your individual circumstances. Tax will initially be deducted at the emergency rate from all annuities unless a P45 form was provided when you applied. When your policy starts, Just Retirement will provide HMRC with the details of the income that you will receive from your annuity. HMRC will then assess this income along with your personal financial circumstances (such as personal allowances, other pensions, income or benefits). They will then issue Just Retirement with the relevant tax code (this can take up to seven weeks). The tax code is then applied to the next annuity payment, which is adjusted accordingly.
What if I have paid too much or too little tax?
You should speak to HMRC directly if you have any questions about the tax you are paying and the tax code applied to your annuity.
You will need your National Insurance number and you will have to quote Just Retirement’s tax reference number 581/JZ59145.
HMRC can be contacted at:
HM Revenue & Customs
PAYE & Self Assessment
PO Box 4000
Telephone: 0845 300 0627 (8am to 8pm Monday to Friday & 8am to 4pm on Saturday)
You will need to contact HMRC directly if you believe that you have been given the wrong tax code. HMRC will only discuss your tax circumstances with you personally. To review your tax code they will need to have the information regarding all of your income, not just the annuity provided by Just Retirement. For more information from HMRC and details on what to do if you think your tax code is wrong, visit this page of the HMRC website.
If you do not reside in the UK it is possible that you will be liable for UK tax on your UK pension income. This income may also be subject to tax in the country in which you live.
Unless you live in a country which has a specific agreement with the UK you could be taxed twice. For more information from HMRC on Double Taxation Agreements, visit this page of the HMRC website.
If you are in doubt on how your pension will be taxed you should seek local, independent advice or contact HMRC’s Centre for Non Residents at:
HMRC Centre for Non ResidentsFitzroy HousePO Box 46NottinghamNG2 1BD
Telephone: +44 135 535 9022 (8am to 5pm Monday to Friday)
Yes, you will receive a Statement (P60) after the end of each tax year. The only exception is if you have a Just Retirement Fixed Term Annuity from which you are not taking any income. In this case you will not receive a P60 but you will receive an annual statement.
The P60 lists the tax code used and the amount of tax that was deducted from the annuity payments made that year. The tax year ends on 5 April and Just Retirement aims to send out P60s by the end of April each year.
If you think that you have paid too much tax you may be due a refund. To check if you are correct, and to organise a refund, you must contact HMRC directly. HMRC will then calculate how much tax you should have paid based on all your income and/or benefits and, if applicable, organise a refund of any overpaid tax.
In order for Just Retirement to make any refund that may be due to you, we must receive a new tax code directly from HMRC.
If you have paid too little tax, you should contact HMRC to give them all of the relevant information. Normally, HMRC issues a new tax code to one or a number of your income providers who will adjust how much tax is paid.
Just Retirement does not calculate your tax code, we will only apply the tax code provided directly from HMRC. Just Retirement recommends that you check with your local tax office if you think your tax code is incorrect. If you have the wrong tax code you could end up paying too much or too little tax.
When HMRC writes to you to tell you that the tax code applicable to your annuity from Just Retirement has changed, they also tell us about your new tax code and you don’t need to contact us.
If the change in tax code relates to a different income, HMRC will not inform us.
When Just Retirement receives a change in tax code we will apply it to your policy, and will adjust your payments accordingly.
Please note there may be a delay in us applying the new code as it can take up to two weeks for the changes to take effect.
HMRC often sends us an updated tax code for the new tax year. In these circumstances we will not apply the revised tax code until the new tax year. If this happens, your payments from the 6th April onwards will be adjusted accordingly.
A basic guide to tax can be found on the gov.uk website here.
The Just Retirement Policy Administration Team is happy to help with any other enquiries that you may have.*
You can contact the team at the following address:
Annuity Policy Administration TeamJust Retirement LimitedVale HouseRoebuck CloseBancroft RoadReigateSurreyRH2 7RU
Telephone: 01737 233297 between 8.30am and 5.30pm Monday to Friday.
*Just Retirement is not a tax specialist and cannot advise you in this area. However, if you do wish to speak to a tax expert, you could go to unbiased.co.uk where you can find one local to you.
Useful links HMRC websiteunbiased.co.uk
Lots of things you may not know about Just Retirement.