New tax code starts with a K
Discussion
I've just got my new tax code through which is K1003. Reading the letter, after allowances it says tax is due on -£10041, this is my allowance -£17656.
I get the feeling this isn't good and will cost me a lot of money. I work for a very large company, have paid all my tax as normal (PAYE) and have no second income. The only thing that will change this year is that we have a final salary pension which is ending at the end of March.
Does anyone understand this and know how much this will be costing me, my code for this year is 660L.
I get the feeling this isn't good and will cost me a lot of money. I work for a very large company, have paid all my tax as normal (PAYE) and have no second income. The only thing that will change this year is that we have a final salary pension which is ending at the end of March.
Does anyone understand this and know how much this will be costing me, my code for this year is 660L.
Edited by jagracer on Friday 11th February 17:04
jagracer said:
I've just got my new tax code through which is K1003. Reading the letter, after allowances it says tax is due on -£10041, this is my allowance -£17656.
I get the feeling this isn't good and will cost me a lot of money. I work for a very large company, have paid all my tax as normal (PAYE) and have no second income. The only thing that will change this year is that we have a final salary pension which is ending at the end of March.
Does anyone understand this and know how much this will be costing me, my code for this year is 660L.
A K code means that your personal tax allowances have been eliminated and turned "negative" because HMRC thinks that you have some sort of taxable benefit. For instance, the normal personal tax allowance is £6,475 - which shows up as a tax code of 647LI get the feeling this isn't good and will cost me a lot of money. I work for a very large company, have paid all my tax as normal (PAYE) and have no second income. The only thing that will change this year is that we have a final salary pension which is ending at the end of March.
Does anyone understand this and know how much this will be costing me, my code for this year is 660L.
Edited by jagracer on Friday 11th February 17:04
Say you had a company car and the annual Benefit in Kind taxable value of that car was £10,000. HMRC wants to tax you on that £10,000. They do this by subtracting the BIK value from your allowances.
This means your allowances go from a positive £6,475 to a negative £3,525. This would be shown by a Tax Code of K352.
Based on what you are saying your Tax coding has been arrived at possibly as follows -
Personal Tax allowance (standard) - £6,475
Taxable Benefit in Kind - £16,516
I wonder what type of "perk" your employer has provided to you that has a
value of £16,516 per annum.
Another reason why HMRC might adjust a coding is to collect arrears of tax from previous tax years.
Whatever the reason, the code does need checking. The one thing we DO know about tax codings is that HMRC can get them terribly wrong. Do not assume it is correct.
ralphrj said:
Was there any explanation in the letter as to why your tax code was changing?
Do you (or have you recently) had non-salary benefits from your employer (i.e. company car, fuel card etc)?
What did your last P11d return have on it?
Edit: I didn't read the original post properly
Nothing extra, I drive a truck, get may salary each week which is PAYE, all savings are taxed at source, there's nothing else except the pension i pay into which is stopping in AprilDo you (or have you recently) had non-salary benefits from your employer (i.e. company car, fuel card etc)?
What did your last P11d return have on it?
Edit: I didn't read the original post properly
Magic919 said:
Ta, read that and none the wiser.Eric Mc said:
A K code means that your personal tax allowances have been eliminated and turned "negative" because HMRC thinks that you have some sort of taxable benefit. For instance, the normal personal tax allowance is £6,475 - which shows up as a tax code of 647L
Say you had a company car and the annual Benefit in Kind taxable value of that car was £10,000. HMRC wants to tax you on that £10,000. They do this by subtracting the BIK value from your allowances.
This means your allowances go from a positive £6,475 to a negative £3,525. This would be shown by a Tax Code of K352.
Based on what you are saying your Tax coding has been arrived at possibly as follows -
Personal Tax allowance (standard) - £6,475
Taxable Benefit in Kind - £16,516
I wonder what type of "perk" your employer has provided to you that has a
value of £16,516 per annum.
Another reason why HMRC might adjust a coding is to collect arrears of tax from previous tax years.
Whatever the reason, the code does need checking. The one thing we DO know about tax codings is that HMRC can get them terribly wrong. Do not assume it is correct.
Thanks for that Eric. I've spoken to my immediate manager and she's the in the same position. She asked her brother who is an accountant and he thinks it may be that my company could be snowed under with the changes due to the pension scheme ending and has given HMRC a figure for everyone to get them off their backs. I certainly have not had £17600 worth of benefits in kind, the only thing in this figure we used to get a few years ago was a £15 M&S voucher at Christmas and we haven't had that for over 5 years so I shall be trying to claim that back as well. I will be making some phone calls on Monday.Say you had a company car and the annual Benefit in Kind taxable value of that car was £10,000. HMRC wants to tax you on that £10,000. They do this by subtracting the BIK value from your allowances.
This means your allowances go from a positive £6,475 to a negative £3,525. This would be shown by a Tax Code of K352.
Based on what you are saying your Tax coding has been arrived at possibly as follows -
Personal Tax allowance (standard) - £6,475
Taxable Benefit in Kind - £16,516
I wonder what type of "perk" your employer has provided to you that has a
value of £16,516 per annum.
Another reason why HMRC might adjust a coding is to collect arrears of tax from previous tax years.
Whatever the reason, the code does need checking. The one thing we DO know about tax codings is that HMRC can get them terribly wrong. Do not assume it is correct.
I've just been to see my neighbour who is an accountant. I had two pages in one envelope, one says my code will be BR and the other gives all the details I mentioned earlier. He noticed that each letter has a slightly different company name on so he thinks they may think I have two jobs when I actually only work for one of them and only take one salary. I will phone them up on Monday and try and sort it. It looks like our payroll dept may have f
ked up somewhere.
ked up somewhere.jagracer said:
He noticed that each letter has a slightly different company name on so he thinks they may think I have two jobs when I actually only work for one of them and only take one salary.
My daughter is a teacher and her employer changed name from Cheshire County Council to Cheshire West and Chester. HMRC have assumed they've all got 2 jobs and has just sent the whole lot of 'em mental tax codes.Deva Link said:
My daughter is a teacher and her employer changed name from Cheshire County Council to Cheshire West and Chester. HMRC have assumed they've all got 2 jobs and has just sent the whole lot of 'em mental tax codes.
I'm not the only one at work in this situation so it seems like our payroll office have fked up big time.These types of confusions occur if the employer fails to explain properly or submit to HMRC the proper forms regarding changes of employment.
If the teachers changed employers because of an admin change in the way the council manage their staff, was this done by a formal ceasing of the old employment with the original employer and the commencement of a new employment with a new employer.
Or was it done without a new employer being created.
Each employer has his own Employer Tax Reference.
If an employee suddenly appears as a new employee working for an entity with a different PAYE reference, without being told otherwise, HMRC will have to assume that the employee now has two jobs, the old job which appears to still exist and the new job. Once they arrive at this conclusion thay have to make a decision to allocate the employee's personal tax allowaqnces to one of these jobs. This will usually mean that one job will have the full tax allowances allocated against it and the other will have no allowances allocated.
All of this updating by employers is supposed to be submitted electronically now so the opportunuity for confusion, in theory, should be less when it was all a paper based system.
However, I wouldn't bet on that.
If the teachers changed employers because of an admin change in the way the council manage their staff, was this done by a formal ceasing of the old employment with the original employer and the commencement of a new employment with a new employer.
Or was it done without a new employer being created.
Each employer has his own Employer Tax Reference.
If an employee suddenly appears as a new employee working for an entity with a different PAYE reference, without being told otherwise, HMRC will have to assume that the employee now has two jobs, the old job which appears to still exist and the new job. Once they arrive at this conclusion thay have to make a decision to allocate the employee's personal tax allowaqnces to one of these jobs. This will usually mean that one job will have the full tax allowances allocated against it and the other will have no allowances allocated.
All of this updating by employers is supposed to be submitted electronically now so the opportunuity for confusion, in theory, should be less when it was all a paper based system.
However, I wouldn't bet on that.
Eric Mc said:
All of this updating by employers is supposed to be submitted electronically now so the opportunuity for confusion, in theory, should be less when it was all a paper based system.
However, I wouldn't bet on that.
I think it's more that it's a case of blindly letting the computer do its stuff. In the old days the local tax office would know what was going on so these situations would be dealt with.However, I wouldn't bet on that.
Just wait until HMRC move the call-centres and processing to India!
I had something like this some years ago. The company I worked for at the time was part of a group of companies and it turned out that the group had submitted info under two company names. The company that actually employed me (which was a very small part of the group) as well as the holding company (which was much larger and handled all the accounts for the small businesses).
Hence HMRC thought I earned double what I really did - All sorted out with a single phone call.
Hence HMRC thought I earned double what I really did - All sorted out with a single phone call.
Deva Link said:
Eric Mc said:
All of this updating by employers is supposed to be submitted electronically now so the opportunuity for confusion, in theory, should be less when it was all a paper based system.
However, I wouldn't bet on that.
I think it's more that it's a case of blindly letting the computer do its stuff. In the old days the local tax office would know what was going on so these situations would be dealt with.However, I wouldn't bet on that.
Just wait until HMRC move the call-centres and processing to India!
Update: Only 30 minutes to get through and sort it with the tax office. My company has notified them that I am working for one subsidiary and not taken me off the old one so they think I have two salaries, it's nice to find out from the tax man that my employer has changed my contract 
Hopefully it's all sorted and she said she'd send out my new tax code in a few days, I've also got rid of a small benefit in kind deduction that I have not received for five years so they should owe me £2.25 at the end of the year.
Many thanks to Eric Mc and everyone else who contributed.
Hopefully it's all sorted and she said she'd send out my new tax code in a few days, I've also got rid of a small benefit in kind deduction that I have not received for five years so they should owe me £2.25 at the end of the year.Many thanks to Eric Mc and everyone else who contributed.
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