Do I have to inform HMRC I’m turning 75?

admin
29 May 2012

Q

At the end of July I will turn 75. I believe I will then qualify for a larger personal tax allowance. Will this take place immediately or do I have to wait until the new tax year next April?
From
SW/via email

A

The personal allowance for those aged 75 and over is £10,660. This should happen automatically after your 75th birthday.

However, I would keep an eye out for a new tax code. If you don’t receive this, then you should contact HM Revenue & Customs to ensure that it issues you with one.

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Following changes set out in the Budget, from 5 April 2013, those allowances will be frozen and anyone aged 65 or over after that date will no longer qualify for an increased allowance.

If your income exceeds £25,400 then the benefit of the increased age allowance is clawed back by £1 for every £2 of income. This means that there will be no benefit if your income exceeds £30,510.

What can you earn before tax?

Everyone is allowed to earn a set amount each year before they have to start paying income tax and national insurance. This is known as your personal allowance and the amount varies depending on your age. Here are the allowances for 2012/13:

Age 0-64: £8,105
Age 65-74: £10,500
Age 75 and over: £10,660

However, there is an income limit. If you earn more than £100,000 a year, for every £2 you earn above that level your personal allowance drops by £1.