In later life, it’s common to have income from different sources. For example, you might still work part-time and have an income from one or more pensions, as well as perhaps from some savings.
If you have income from more than one source, make sure HMRC know this – so you pay the right amount of tax against each income.
Your Personal Allowance will normally be allocated against your main job or pension – usually the income that’s more than the Personal Allowance.
If this is the case, any other income you get will all be taxed according to which tax band the other income falls into.
Details of the current tax bands for the UK are on the GOV.UK website
Your PAYE tax code will have letters against it, which tells you how much tax will be deducted from each income source.
Do you have income from different sources below the Personal Allowance (£12,570 for 2021-22)? Then ask HMRC to spread your Personal Allowance between the different sources of income to make sure you don’t pay too much tax.
If you do overpay tax, you can claim this back at the end of the tax year.
Make sure you check the tax code(s) so you know that the right amount of tax is deducted.
Not sure whether your tax code is correct? The charity the Low Incomes Tax Reform Group have more information on their website
If you continue to work and are self-employed or your total income (including money from pensions and PAYE) is £100,000 or more for the tax year, you’ll have to fill in a Self Assessment tax return.
You’re also responsible for paying tax on other income you have, such as from property or investments. You might have to fill in a Self-Assessment tax return for that too.