Tax codes

[the-norseman]

Hi all,

Had an email late last night from Gov UK stating my tax code had been changed, I didn't click on the link, instead went directly to the Gov website and logged in and can see yes my tax code has changed from 1240L to 1236L

Anybody know the reason for this in July? Looking back I was on 1226L up until March, then my April pay was 1240L, is this a case of the large company I work for getting it wrong?

I get medical insurance and a travel discount through work which is taxable, guessing it could be to do with that.

Edited by the-norseman on Friday 21st July 09:57

[Eric Mc]

Does it not explain the change?

They usually do have a note as to why the code has been changed.

[the-norseman]

Nope nothing that I can see. I'm going to hazard a guess its to do with "company benefits" I got a discount travel card earlier in the year so guess its that.

[Edible Roadkill]

Company medical is taxable so they’ve probably deducted this from your tax free allowance.

You can check though, I’ve found hmrc app to be of use.

[the-norseman]

I've had the medical for a few years, suspect its the travel discount that has done it.

[Eric Mc]

Did they attach a proper Notice of Tax Code to the e-mail? The full Notice explains why the change has occurred. If you have a tax account at HMRC, you should be able to access the Code change on-line.

[Sheepshanks]

Does it matter? The difference is neither here nor there. It'll (probably ) sort itself out in the end.

Isn't 1257L the standard 23-34 tax code? So there's not much BIK being added on for OP.

[Eric Mc]

Sheepshanks said:

Does it matter? The difference is neither here nor there. It'll (probably ) sort itself out in the end.

Isn't 1257L the standard 23-34 tax code? So there's not much BIK being added on for OP.

It does matter if it's wrong. That's why they give details to allow the taxpayer to check.

Many taxpayers have received unpleasant tax shocks because they never checked their coding notices.

[frisbee]

I get all sorts of taxable benefits, they don't affect my tax code, tax for them is deducted from my pay over the year.

It sounds like either your company miscalculated your tax last year or HMRC have somehow identified something you should have paid tax on (interest?) and they are recovering it by adjusting your tax free allowance.

[mcflurry]

It's a £400 difference to the starting point - how much is your ticket?

[the-norseman]

mcflurry said:

It's a £400 difference to the starting point - how much is your ticket?

Ticket is free but think they said it was about £200 in tax, and then the medical insurance is worth £xxx

[craig1912]

the-norseman said:

Ticket is free but think they said it was about £200 in tax, and then the medical insurance is worth £xxx

£200 tax or a taxable value of £200?
The medical insurance is likely to be a fairly significant amount in taxable value so I’d say your tax code is probably wrong and you aren’t being taxed enough.

[Sheepshanks]

frisbee said:

I get all sorts of taxable benefits, they don't affect my tax code, tax for them is deducted from my pay over the year.

That's "payrolling" the benefit - your employer adds the cash equivalent of the benefit to your gross pay so you pay the right amount of tax.

[Kirkmoly]

Sheepshanks said:

Does it matter? The difference is neither here nor there. It'll (probably ) sort itself out in the end.

Isn't 1257L the standard 23-34 tax code? So there's not much BIK being added on for OP.

This.

It really doesn’t matter in the least. The tax code is only a guideline as to how much should be withheld from your earnings. You can, and should, true up at the end of the year. This obsession with tax codes is utterly absurd. Filing a uk tax return takes about 10 minutes.

[Sheepshanks]

Kirkmoly said:

Filing a uk tax return takes about 10 minutes.

Obviously you should keep an eye on things, as you suggest, but for someone with 'normal' cirumstances it should correct itself without needing to do a tax return. HMRC doesn't want people to do them unless necessary.