The income tax bands for the tax year 2019/20 are shown below. These are set by the Government and change every year.

Tax band for 2019/20 Taxable income Tax rate
 Personal Allowance  Up to £12,500  0%
 Basic rate  Between £12,501 and £50,000  20%
 Higher rate  Between £50,001 and £150,000  40%
 Additional rate  More than £150,000  45%

The tax you pay depends on your individual circumstances.

The above examples are based on current law and tax rates and may change. If you live in Scotland or Wales you may have a different income tax rate or band.

The amount you can earn in a tax year without paying tax is called your Personal Allowance. You’ll only pay tax on income over that allowance. The Personal Allowance drops by £1 for every £2 above £100,000. There is no Personal Allowance where income is higher than £125,000.

Tax will normally be taken off by the pension provider of your income before you receive it, and they’ll pay HMRC the tax you owe on your behalf. If you believe that your tax code is incorrect please contact HMRC who will issue a revised tax code if applicable. 

HMRC telephone number: 0300 200 3300

What is my standard Personal Allowance?

The standard Personal Allowance for the 2019/20 tax year is £12,500. Any income less than this won’t be taxed. You can check your own Personal Allowance at Income tax rates.  

How does my pension provider know how much tax I should pay?

The tax deducted is based on the tax code given to your pension provider.

If your pension provider hasn’t received confirmation of your tax code from HMRC, or you haven’t been able to provide a current P45, then your pension provider will use an emergency tax code. This may mean you’ll pay more tax than is due. The emergency tax code assumes you’ll carry on receiving the same amount each month, even if the money you’re taking is a one-off withdrawal.

How can I check the tax I’ve paid is correct?

If you want to check the amount of tax you've paid is correct, you can do that at Check your tax online.

HMRC automatically checks at the end of each tax year if you’ve paid too much or too little tax.

If you think you've paid too much tax, you can wait for your pension provider or HMRC to resolve the over-payment, or, if you don’t want to wait, you can reclaim it.

Find out more about reclaiming any overpayment at claiming a tax refund.  

I think I’ve paid too much tax?

HMRC automatically checks at the end of each tax year if you’ve paid too much or too little tax.

If you think that you’ve paid too much tax and don’t want to wait until the end of the tax year for a refund, contact contact HMRC

I’m not sure what my best option is from a tax perspective?

Don’t worry. There are lots of different options available. That’s why we recommend you seek independent financial advice to help you choose the best options for your personal circumstances.

Find out more about help and guidance.