Pension, employment and PAYE

[h0rsewithn0name]

Just a question about income tax - I hope someone can help me.

I'm going to start collecting my local government pension later this year, but will continue in my part time employment. I realise I will have to pay tax on both of these incomes, but how is it done? I'm not state retirement age, so will not collect my state pension for a few years.

My employment income is £12,000 and my local government pension will also be £12,000. My tax code will be pretty average, apart from a small amount of surplus allowances that my DH transfers to me.

I'm not adverse to completing a self assessment if necessary as I do this already for my DH. I may continue paying into my employer's pension scheme too - I take it there is no reason to stop this?

It will be done through the PAYE system. The LGPS will ask HMRC what tax code they are to use.

You can ask HMRC to split your allowance. They could offset most of the £12,500 allowance against your employment, and the balance against your pension, or you could have it split 50/50 if you prefer.

When you start getting the pension, ring the HMRC employee helpline and explain, and they'll do the necessary.

I did this 6 years ago when I started getting my occupational pension.

Thank you both for your replies, that looks easier than I thought. I've always had quite simple tax affairs, so I'm less daunted now with your replies.