Tax code

[Oxo01]

I retired in May 19th 2024,
My work pension started same date which i pay tax on.

About a month later I got a one off payment as they still owed me over a weeks pay.
( I also get the full state pension)

I got a P45 today for year 24 to 25
Noticed that under the section
Pay and income tax, the pay in this employment is very very low, no where near what my monthly pensio .is, income tax was deducted.

To add to my confusion it has a tax code of OT M1
Does anyone know exactly what / why this is pls?

I googled it and it says something about emergency tax or / if emploer or HMRC are unsure what my income was / is. I cant recall exact wording. But M1 means Month 1 ?

I will call my old work place or HMRC but any info would be helpfull.

My last work pension statement i recived was for period end

30/4/ 25 shows tax code BR as before.
So I wandering if it has anything to do with the odd weeks pay I got in June ?
Why would they be unsure now ?

There should be different PAYE references for your pension income and the employer income for work done. This because the pension scheme is a separate legal entity from your former employer. When you retired the pension scheme would be given a tax code to use. When your employer made a one off payment for wages owed they applied the OT code as if all your personal tax free allowance has been used by your pension income. M1 is for the tax month the payment relates to. It should all sort itself at the end of the tax year, and If this was a one off payment shouldn't occur again.

the P45 is for your leaving employment - it should just cover your wages for the current tax year for the short period from 6th April 2025 until you left. It won't include your pension.

Thank you for replies,
So would I owe or they owe me anything ? And does this mean my tax code will remain untill next year ?
I looked on gov.uk and saw a estimated earning for this year as Over £20,000 more than I actually get for my yearly work pension.

Do i want or call them ( although I'm.still a bit confused )

From what you describe it sounds more right than wrong.

For the current tax year, the State Pension will use up most/all of your Personal Allowance so your work pension will be due to have mostly 20% (BR) deducted.

For the last tax year, HMRC do also tend to get things right via the PAYE system but to double check you need to add up your gross taxable from all sources (P60 + P45 + State Pension) and also add up the tax deducted as shown on P60 + P45. And if you don’t know how to calculate find an online calculator for 24/25 and put your total gross in there and see what tax should’ve been paid and compare to your actual tax deducted.

Also the gov estimate will be adding State Pension + Work Pension. If it’s still more than £20k over then it will only matter if it they think you have more than £50k. If their estimate is less than £50k then if you only have those two sources of income and the work pension with a BR code, you will only pay what you’re due.

Thanks all
I just got a P60 today it shows exactly what I get for work my pension for last year to 5th April this year, and tax paid tax code BR so that's all correct.

Just don't understand the P45 info I got the other day. With OT M1 tax code for same year as above.

@Blyvoorgirl I calculated all income etc as you said and if i done correctly it , I've paid £300 less than the calculater says .

HMRC will pick that up eventually and most likely adjust your code to account for it.

Thank you.

Your P45 may be just for any extra payment from your employer after you'd already officially left. Employers can't change the original P45 once it's been issued, so the HMRC instructions are to put the employee back on the payroll under a new reference to make any subsequent one-off payments like bonuses or unpaid holiday pay etc, and if they do that, then to use the Week1/Month1 tax code. As others have said, it sounds right and HMRC will eventually pick up any over/under payment of tax in due course. If you look on your payslips, P45s, and P60s from both the employer and their pension scheme, you should see different employer PAYE references and probably different employee numbers from your previous employer.

Thank you