CLAIM AGE ALLOWANCE WHILE YOU
CAN
Were you born before 6 April 1948? If so you are lucky. You are the last
generation to pay less tax just because of your age. This tax year – 2012/13 – a
person born before that date can have an income of at least £10,500 before any
tax is due. People younger than that start paying tax when their income hits
£8,105.
If you reached 65 in this current tax year you may have to remind HM
Revenue & Customs to give you the benefit of the higher tax-free allowance.
Normally the taxman waits until the following tax year and then looks
back to see if you were entitled. Because you don’t just have to be the right
age. Your income must not be above £25,400 to get the full extra allowance. If
it was below that limit in 2012/13 then you will get the benefit this year and
in the future.
The rule about your income is complicated. If your income is £25,400 or
less you get the extra tax allowance in full. If it is above that you lose £1 of
the allowance for every £2 of income above it. So when your income reaches
£30,190 your allowance falls to the £8,105 younger people get and stays there
until your income reaches £100,000 when even that starts to disappear – chance
would be a fine thing!
The age allowance of £10.500 for those born before 6 April 1948 (and
£10,660 for those born before 6 April 1938) has now been frozen by the
Government and will not rise in future. But it is still worth claiming as it
could cut your tax bill by up to £479 this tax year.
And anyone who reaches 65 on 6 April next year or later will not get this
extra allowance for reaching 65. They will get the same allowance as younger
people.
HMRC taxes helpline is 0845 300 062 but it is cheaper to call 01355
359022 from a mobile or from a landline – dial 141 first so HMRC can’t filter
out UK callers. Or find your local HMRC Enquiry Centre where you can use a free
telephone to contact the helpline. Find your local centre here
http://www.hmrc.gov.uk/enq
If you are still working make sure that you don’t to pay National
Insurance contributions once you reach state pension age – 65 for a man and
currently born before 6 February 1951 for a woman. If you are self-employed
weekly Class 2 contributions also stop when you reach pension age. But class 4
contributions have to be paid in the whole tax year in which you reach pension
age but not, of course, after that.
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