I’m retired but taxman has cut my allowance

S.L. writes: I have a small Forces pension and some savings, and I was considering taking up parttime employment to help make ends meet. However, I then received news that my annual tax allowance had been reduced. I have no idea why this should be, as the amount taken from my work pension kept me under the normal tax threshold of £12,750 a year. I wrote to the tax office to ask for help with understanding the discrepancy, but as they are all still working from home, I doubt if I will get a response any time soon.

YOU wrote to the Revenue & Customs on November 23 last year, asking why your Pay As You Earn tax code had been cut from 1254L to 887L, but you received no reply.

This is close to normal nowadays, unfortunately. In my mailbag, only the DVLA in Swansea attracts more complaints about the near impossibility of getting replies.

I asked Revenue officials to intervene and they quickly found the cause of the problem. You took a one-off withdrawal from a second pension provider last October, and the PAYE system assumed this would be a regular thing, increasing your income and your tax. Staff have now contacted you to offer a repayment within 30 days if you lodge a claim, or a refund will be made automatically after the end of the tax year on April 5.