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Topic Title: Tax help for a thick squaddie`
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Created On: 23 April 2009 01:55 PM
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 23 April 2009 01:55 PM
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paul176

Posts: 2
Joined: 23 April 2009

Hi

Im about to leave the Army with an approx 9K pension and I have been offered a job in civvie street paying 36K. Do i take the pension into consideration when working out which tax band i will be on? And if so do i pay 40% tax on the whole 45K. Im married, my wife earns a low wage and we have a son in school.

Thanks so much in advance...
 23 April 2009 02:08 PM
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mbirdi

Posts: 1907
Joined: 13 June 2005

The best people to ask are: http://www.hmrc.gov.uk/index.htm
 23 April 2009 03:31 PM
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amillar

Posts: 1918
Joined: 28 May 2002

You certainly don't pay 40% tax on the whole 45k, only on the bit above the threshold which will be somewhere around 40-42k. So at worst you would only pay 40% tax on 3-5k of your earnings.

-------------------------
Andy Millar CEng MIET CMgr MCMI

http://www.linkedin.com/in/millarandy

"The aim of argument, or of discussion, should not be victory, but progress." Joseph Joubert
 23 April 2009 03:59 PM
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westonpa

Posts: 1771
Joined: 10 October 2007

Don't be afraid to contact your local Inland Revenue tax office and they will give you honest advice on how much tax you will pay and also on any legal methods to lessen your tax burden. I used them all the time when I was self employed. Just a shame they could not offer a coffee when we were discussing things.

Regards.
 23 April 2009 04:14 PM
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paul176

Posts: 2
Joined: 23 April 2009

Guys thanks so much...

Paul
 24 April 2009 11:48 PM
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spinlondon

Posts: 4517
Joined: 10 December 2004

Do you have to take the pension, or can you allow it to build up, and take it later?
Can you assign it over to your wife?
Can you employ your wife as bookeeper?
Can you place the extra into a trust fund for your kids?
 27 April 2009 02:47 PM
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mbirdi

Posts: 1907
Joined: 13 June 2005

By the way paul176, you're not at all thick when it comes to working out your taxes. I think we're all in the same boat.

In your case, all that's required is to deduct the allowances from your total income to work out the remaining income that's liable for tax. But the Government puts so much spin on things that it's practically impossible to be sure you've got it right and that requires you to seek advise from the IR.

When will this Government realise that the public require information in plain English and to stop abusing our human rights by trying to con us with spin?

Is it any wonder some Bank CEOs played the Government at their own game and walked away with hugh pensions.

Edited: 27 April 2009 at 02:50 PM by mbirdi
 31 January 2010 11:46 PM
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Murielson

Posts: 1
Joined: 25 July 2008

Bit late to the party but I too am an ex-squaddie and can confirm that you have to declare your pension and pay tax on it.

I have just submitted my latest tax return and my military pension is on there and taxed at the 40% rate. I do pay 40% on all of my pension due to my income and have arranged with the tax office for them to deduct it from my pension so that I do not get a large bill in the early New Year.

Glad to hear you have a well paid job to go to and enjoy your pension. Don't let an employer try to convince you to accept a lower wage due to your pension as can be quite common!!
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