Anyone explain a tax code?
Discussion
worsy said:
Reduction (as previous posters have said) will either be due to an underpayment of tax, taxable benefits (medical, car etc) or a combination of both. A normal tax code would be 1250L (12500).
This. What I find incredible is how many people at my company have a company car and have literally no idea how the BIK works. We have the option of a car allowance and people basically fall into two camps.1)The new employees who have done the maths and take the allowance.
2)The people who have always had a company car and don't realise that the mid range VW Golf TDi is effectively costing them £500 a month once the lost car allowance and BIK is taken into account.
I explained this to one guy and he ended up leasing a Seat Leon for £220 a month instead. Another guy (who is always moaning of being skint) I found a lease for the Kia Xceed for £180 a month. Apparently his wife didn't like it so he ended up ordering the VW T-ROC through work instead.
Joey Deacon said:
worsy said:
Reduction (as previous posters have said) will either be due to an underpayment of tax, taxable benefits (medical, car etc) or a combination of both. A normal tax code would be 1250L (12500).
This. What I find incredible is how many people at my company have a company car and have literally no idea how the BIK works. We have the option of a car allowance and people basically fall into two camps.1)The new employees who have done the maths and take the allowance.
2)The people who have always had a company car and don't realise that the mid range VW Golf TDi is effectively costing them £500 a month once the lost car allowance and BIK is taken into account.
I explained this to one guy and he ended up leasing a Seat Leon for £220 a month instead. Another guy (who is always moaning of being skint) I found a lease for the Kia Xceed for £180 a month. Apparently his wife didn't like it so he ended up ordering the VW T-ROC through work instead.
At high annual mileage the company car can make sense financially. Most lease deals are low mileage and the rate go up very quickly. Most company cars are also fully maintained.
You logic is sound but you need to look at the full costs not just the tax (and lost allowance) against the head line lease.
You logic is sound but you need to look at the full costs not just the tax (and lost allowance) against the head line lease.
Starfighter said:
At high annual mileage the company car can make sense financially. Most lease deals are low mileage and the rate go up very quickly. Most company cars are also fully maintained.
You logic is sound but you need to look at the full costs not just the tax (and lost allowance) against the head line lease.
The guy who got the Leon did 15k miles in three years in his previous company car. I pointed out this cost him £1 a mile!. Another guy with a A class had done 1600 miles at 6 months old.You logic is sound but you need to look at the full costs not just the tax (and lost allowance) against the head line lease.
None of us drive any real business mileage
Has HMRC sent you a Detailed Notice of Coding? That usually explains how they have arrived at the current code.
Alternatively, if you have signed up to have a Personal Tax Account with HMRC, you can go online and find out why your coding the way it is.
If it is incorrect, you can notify HMRC of their error and they will change it.
Alternatively, if you have signed up to have a Personal Tax Account with HMRC, you can go online and find out why your coding the way it is.
If it is incorrect, you can notify HMRC of their error and they will change it.
Joey Deacon said:
This. What I find incredible is how many people at my company have a company car and have literally no idea how the BIK works. We have the option of a car allowance and people basically fall into two camps.
1)The new employees who have done the maths and take the allowance.
2)The people who have always had a company car and don't realise that the mid range VW Golf TDi is effectively costing them £500 a month once the lost car allowance and BIK is taken into account.
I explained this to one guy and he ended up leasing a Seat Leon for £220 a month instead. Another guy (who is always moaning of being skint) I found a lease for the Kia Xceed for £180 a month. Apparently his wife didn't like it so he ended up ordering the VW T-ROC through work instead.
What about personal insurance costs? Someone in their 20s living in a City without previous ncb may well have to spend £2/3K for car insurance on a car allowance car, that would be free for them if they had a company car. 1)The new employees who have done the maths and take the allowance.
2)The people who have always had a company car and don't realise that the mid range VW Golf TDi is effectively costing them £500 a month once the lost car allowance and BIK is taken into account.
I explained this to one guy and he ended up leasing a Seat Leon for £220 a month instead. Another guy (who is always moaning of being skint) I found a lease for the Kia Xceed for £180 a month. Apparently his wife didn't like it so he ended up ordering the VW T-ROC through work instead.
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