Tax code change
Author
Discussion

Rick101

Original Poster:

7,188 posts

179 months

Tuesday 2nd February 2021
quotequote all
I could ring the tax office but suspect they'll be busy this time of year.

I've had a tax demand and letter to say my code will be adjusted to reclaim the amount due. I'm sure it's correct but I just wanted to understand the maths.

I owe £775
My tax free allowance will reduce by £1938

I initially thought 775 must be 20% of 1938 but nowhere near.
How does paying tax on an extra 1938 equate to recouping £775?

Thanks.

ReallyReallyGood

1,641 posts

159 months

Tuesday 2nd February 2021
quotequote all
40%

Rick101

Original Poster:

7,188 posts

179 months

Tuesday 2nd February 2021
quotequote all
Ahh, obvious really. Long day!

Not usually higher rate but headed that way last year or two.

Thanks.