Should i be paying tax at 22% on my mineworkers pension if i am on incapacity benefit?

Question

Should i be paying tax at 22% on my mineworkers pension if i am on incapacity benefit?

Answer 1

Most incapacity benefit is taxable so your personal allowance will be set against the benefit.

If there is any allowance left over it could be used against your mineworkers pension.  You will need to contact the Revenue (See the details on your last code number) to get the pension code altered.

Otherwise you should be paying basic rate which is now 20%.

Answer 2

For most incapacity benefit is taxable but those who have had it from before they changed the rules around 10 years ago it isnt.

You must be under 65 to get this benefit so currently your first £5435 of total income pension plus benefit (if taxable) is tax free and the rest taxed at 20%. £5435 is soon to increase to £6035 to compensate for increasing the 10% tax rate.

You will pobably be one of Browne's tax victims and pay more than you used to!

Answer 3

Yes = you pay Tax on all Income .. that includes benefits & pensions ..

The Pension provider usually deducts any Tax (due on the Pension) before paying you.. since you have another source of Income you may well be underpaying Tax ... and could end up with a big bill at the end of the Tax year.

Contact your local Tax office .. (they will adjust your coding & you will have more Tax deducted from the Pension to cover the Tax due on IB)