Tax Code Question
Discussion
I do one job but get paid £17,500 each by 2 different ltd companies. When i first joined they set up the tax wrong so i underpaid for a few months and now my tax code for company 1 is now 832L whereas the other is BR20.
Previously I worked from home for 4 years so i wanted to claim back the £216 per year I was eligible for, so called HMRC and they said I have a new tax code for company 1 of 1275L.
I've just done some workings out and can't seem to get the £900 i'm due back.
Company 1 paid me £1,162.83 net this month, the HMRC app says it should be £1,214.72. Which is strange in itself.
The HMRC app says that I should get £1,288.55 on the new tax code. That's only a small difference between both the above mounts and with only 2 paydays before the end of the tax year I can't see how I will receive the £900 rebate.
Can anyone else shed any light on it?
Previously I worked from home for 4 years so i wanted to claim back the £216 per year I was eligible for, so called HMRC and they said I have a new tax code for company 1 of 1275L.
I've just done some workings out and can't seem to get the £900 i'm due back.
Company 1 paid me £1,162.83 net this month, the HMRC app says it should be £1,214.72. Which is strange in itself.
The HMRC app says that I should get £1,288.55 on the new tax code. That's only a small difference between both the above mounts and with only 2 paydays before the end of the tax year I can't see how I will receive the £900 rebate.
Can anyone else shed any light on it?
PurpleMoonlight said:
What £216 pa are you referring to?
Presumably the flat rate the self-employed can claim for working from home:https://www.gov.uk/simpler-income-tax-simplified-e...
CzechItOut said:
Presumably the flat rate the self-employed can claim for working from home:
https://www.gov.uk/simpler-income-tax-simplified-e...
That's for self employed, I've always been employed by companies. This is the correct link:https://www.gov.uk/simpler-income-tax-simplified-e...
https://www.gov.uk/tax-relief-for-employees/workin...
PurpleMoonlight said:
That is your employer paying you £18 pm without you having to pay tax on it. It is NOT you claiming £216 pa from HMRC.
Your employer can pay you the £18 pm or you can claim the tax relief from HMRC. If you follow the link and answer the questions, it asks you if you have been reimbursed by your employer, i clicked no, it said I could claim the relief instead.Just to add, I called HMRC and they confirmed this also.
Edited by alistair1234 on Wednesday 6th February 13:42
If you say so, but I can only see where you claim tax relief on actual expenses not the £18 pm dispensation.
You are not claiming back £216 pa from HMRC as you originally stated, you are claiming tax relief on £216.
£216 x 20% x 4 = £172.2
Or double if you were a 40% tax payer for each year.
You are not claiming back £216 pa from HMRC as you originally stated, you are claiming tax relief on £216.
£216 x 20% x 4 = £172.2
Or double if you were a 40% tax payer for each year.
alistair1234 said:
... and with only 2 paydays before the end of the tax year I can't see how I will receive the £900 rebate.
I do self assessment so that works it out, however my wife has a small pension and is paid by a couple of companies - all smallish amounts, certainly not enough to get near 40% tax. She doesn't do self-assessment and out of the blue got a statement and then cheque for around £1500 late last year. So I assume from this that it sorts itself out eventually. If it doesn't, then call them - but you might end up doing self-assessment (not a big deal). As others have pointed out, you're not due as much as you think though.
PurpleMoonlight said:
If you say so, but I can only see where you claim tax relief on actual expenses not the £18 pm dispensation.
You are not claiming back £216 pa from HMRC as you originally stated, you are claiming tax relief on £216.
£216 x 20% x 4 = £172.2
Or double if you were a 40% tax payer for each year.
If you employer can pay you £216 pa, why would the claim from HMRC be less? Surely it's like mileage where if your employer pays you 5p you can claim the remaining 40p from HMRC. In this case, my employer paid me £0 so i'm claiming the full £216 from HMRC.You are not claiming back £216 pa from HMRC as you originally stated, you are claiming tax relief on £216.
£216 x 20% x 4 = £172.2
Or double if you were a 40% tax payer for each year.
Sheepshanks said:
I do self assessment so that works it out, however my wife has a small pension and is paid by a couple of companies - all smallish amounts, certainly not enough to get near 40% tax. She doesn't do self-assessment and out of the blue got a statement and then cheque for around £1500 late last year.
So I assume from this that it sorts itself out eventually. If it doesn't, then call them - but you might end up doing self-assessment (not a big deal). As others have pointed out, you're not due as much as you think though.
Thanks, I don't know how, but my HR contact called to say she had received the tax code from HMRC and the difference in my net pay this month will be £900.So I assume from this that it sorts itself out eventually. If it doesn't, then call them - but you might end up doing self-assessment (not a big deal). As others have pointed out, you're not due as much as you think though.
In my calculations in my original post I had forgotten to take in to account my pension contributions.
alistair1234 said:
If you employer can pay you £216 pa, why would the claim from HMRC be less? Surely it's like mileage where if your employer pays you 5p you can claim the remaining 40p from HMRC. In this case, my employer paid me £0 so i'm claiming the full £216 from HMRC.
Mileage claims don't work that way. You would only be claiming tax relief (20% or 40%) on the £0.40p and not the £0.40p itself.Perhaps your misunderstanding of this is the reason why your working from home claim is also incorrect.
Sorry about the mileage bit, I've never had to do it, I just thought that's how it worked.
I've just seen this on another website - Working through a limited company means if you work from home, HMRC allows you to claim £4 each week without keeping any detailed records. The other good news is that HMRC doesn’t believe this to be a ‘benefit in kind’, which means you won’t have any tax to pay on this through your Self Assessment.
What does that refer to? My situation, or someone who is self employed. If they are self employed they wouldn't be working through a Ltd co would they?
I've just seen this on another website - Working through a limited company means if you work from home, HMRC allows you to claim £4 each week without keeping any detailed records. The other good news is that HMRC doesn’t believe this to be a ‘benefit in kind’, which means you won’t have any tax to pay on this through your Self Assessment.
What does that refer to? My situation, or someone who is self employed. If they are self employed they wouldn't be working through a Ltd co would they?
alistair1234 said:
Sorry about the mileage bit, I've never had to do it, I just thought that's how it worked.
I've just seen this on another website - Working through a limited company means if you work from home, HMRC allows you to claim £4 each week without keeping any detailed records. The other good news is that HMRC doesn’t believe this to be a ‘benefit in kind’, which means you won’t have any tax to pay on this through your Self Assessment.
What's good about that? The best tactic is to keep good records and claim the correct amount - not a figure made up by somebody at HMRC.I've just seen this on another website - Working through a limited company means if you work from home, HMRC allows you to claim £4 each week without keeping any detailed records. The other good news is that HMRC doesn’t believe this to be a ‘benefit in kind’, which means you won’t have any tax to pay on this through your Self Assessment.
Eric Mc said:
What's good about that? The best tactic is to keep good records and claim the correct amount - not a figure made up by somebody at HMRC.
What's good is that rather than having to try and get 4 years worth of gas and electric bills together, I can just claim a nominal amount which probably covers it.I am thankful for all of the replies in this thread, everyone is a lot more knowledgeable than me i'm sure, i'm just a bit confused as to the way things are written on the HMRC website.
From what I can gather, employers can definitely pay their employees £4 a week, that's £4 benefit not £4's worth of tax relief. Why would that be different to claiming the amount from HMRC?
When I called HMRC yesterday, the person i spoke with didn't have any problems with what i was trying to do and asked me that i definitely worked from home out of necessity not choice, which i do, and even said I could claim for some extra months. Surely he wouldn't do that if it was wrong?
My tax code has changed from 832L to 1275L which is a difference of £4,430 or £886 at 20%.
Thanks again for any responses.
alistair1234 said:
Sorry about the mileage bit, I've never had to do it, I just thought that's how it worked.
I've just seen this on another website - Working through a limited company means if you work from home, HMRC allows you to claim £4 each week without keeping any detailed records. The other good news is that HMRC doesn’t believe this to be a ‘benefit in kind’, which means you won’t have any tax to pay on this through your Self Assessment.
What does that refer to? My situation, or someone who is self employed. If they are self employed they wouldn't be working through a Ltd co would they?
It's claiming £4 pw from your EMPLOYER not HMRC.I've just seen this on another website - Working through a limited company means if you work from home, HMRC allows you to claim £4 each week without keeping any detailed records. The other good news is that HMRC doesn’t believe this to be a ‘benefit in kind’, which means you won’t have any tax to pay on this through your Self Assessment.
What does that refer to? My situation, or someone who is self employed. If they are self employed they wouldn't be working through a Ltd co would they?
You can receive this tax free.
alistair1234 said:
What's good is that rather than having to try and get 4 years worth of gas and electric bills together, I can just claim a nominal amount which probably covers it.
I am thankful for all of the replies in this thread, everyone is a lot more knowledgeable than me i'm sure, i'm just a bit confused as to the way things are written on the HMRC website.
From what I can gather, employers can definitely pay their employees £4 a week, that's £4 benefit not £4's worth of tax relief. Why would that be different to claiming the amount from HMRC?
When I called HMRC yesterday, the person i spoke with didn't have any problems with what i was trying to do and asked me that i definitely worked from home out of necessity not choice, which i do, and even said I could claim for some extra months. Surely he wouldn't do that if it was wrong?
My tax code has changed from 832L to 1275L which is a difference of £4,430 or £886 at 20%.
Thanks again for any responses.
Or perhaps your tax code for the year should be 1185L and they have added £900 or £180 at 20%.I am thankful for all of the replies in this thread, everyone is a lot more knowledgeable than me i'm sure, i'm just a bit confused as to the way things are written on the HMRC website.
From what I can gather, employers can definitely pay their employees £4 a week, that's £4 benefit not £4's worth of tax relief. Why would that be different to claiming the amount from HMRC?
When I called HMRC yesterday, the person i spoke with didn't have any problems with what i was trying to do and asked me that i definitely worked from home out of necessity not choice, which i do, and even said I could claim for some extra months. Surely he wouldn't do that if it was wrong?
My tax code has changed from 832L to 1275L which is a difference of £4,430 or £886 at 20%.
Thanks again for any responses.
Do you owe tax from a previous tax year which they are collecting via your coding?
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