New job, tax codes all over the place! HMRC fail.

[Mastodon2]

I have recently started a new full time job working 40 hours a week, having finished university. I did not leave my part job job, in which I work 15 hours a week earning roughly only £4100 a year from this evening job. I am working 55 hours a week, but I am currently being diddled on tax by HMRC.

When I started my new job, I filled in a P46, but handing it in only a week before I got paid, I was given an emergency tax code and taxed several hundred pounds on my wage at my full time job. I was paid from my part time employer several days later and was not taxed at all.

This morning I received a letter from HMRC stating that I have two new tax codes, 431L on my main job, and my 215T on my evening job. Apparently it would seem, HMRC thinks my evening work is my "main" job and that my full time job is a secondary job, which is completely retarded. Rather than attempt to contact me or my employers to clarify the situation it looks like I've been slung another couple of frankly ridiculous tax codes. I am finding conflicting info on the net and their website is unclear. What do these tax codes mean, and how much can I earn (and expect to lose as a percentage) from each job as tax?

Furthermore, does anyone have any advice on how to contact these people? Their office is closed when I am at home and only open when I'm at work. When I try to phone them, I get put on hold and no one ever bothers to answer, despite me having spent fking ages on hold to them in the past week. Apparently I cannot email them as they do not have staff assigned to deal with queries of my nature. I suppose I will have phone them during work time, but am I any more likely to get a fking answer then?

I'm so fking annoyed with this situation, I'm gettig fking fleeced and I can't even get in touch with the fking office to sort the damn thing out. Always the fking way, so desparate to thieve our cash but when we want to contact them to get payments sorted they just aren't fking bothered!

[Mr Whippy]

The most important thing is that in two months it'll be the end of the tax year and you can look forward to it all working itself out, and a nice chunk of cash back.

OR, you could waste time trying to sort it out now...

Not sure if the problem will persist into next year, but you always pay the right amount of tax in the long run, so don't worry THAT much.

Dave

[Nick M]

Actually, I don't think it's as wrong as you seem to think it is.

What they appear to have done with your PAYE code(s) is:

- allocated the majority of it to your main job, with a cumulative code (which is good)
- allocated about 1/3 of your code to your part time job, with a 'T' code which means they will review this on a year by year basis

Have a quick look here for what the letters mean:

http://www.hmrc.gov.uk/incometax/codes-basics.htm

The numbers are the amount of your annual personal allowance being used against your earnings from that job, with the last digit knocked off. So if you had one job and your annual personal allowance was £6,475 then your PAYE code would be 647L.

It works on a cumulative basis through the year and is pretty much self correcting when you have one job, but it can be more fiddly when you have two employments.

What I'd recommend is that when you get your P60s for the current tax year you do a quick 'back of the envelope' calc to:

- add up your earnings figures
- add up the tax paid numbers
- deduct your personal allowance from the total earnings
- calculate the tax using the 2010/2011 tax year rate bands
- compare that with the amount of tax paid

http://www.hmrc.gov.uk/rates/it.htm

If you think you've overpaid then check out the following to see where to go next:

http://www.hmrc.gov.uk/incometax/overpaid-thro-job...


Obviously this doesn't take into account anything else which might affect your taxes for the year, but hopefully it will point you in the right direction.

[Eric Mc]

The standard tax free allowance for most people for 2010/11 is £6,475. In other words, you can earn up to £6,475 tax free. Everything above £6,475 will be taxed at 20% (until you reach the Higher Tax Bracket at earnings above £43,875.

The personal tax allowance of £6,475 is shown as a tax code of 647L

Your two tax codes for 2010/11 are 431L and 215T. If you add the two codes together, you will see that they come to 646, which means that HMRC are essentially splitting your correct 647L code as best they can between your two sources of PAYE income.

I would say, for once, they have got is about right and it will mean that by 5 April 2011, you will have paid the correct PAYE on your combined PAYE earnings.

I would recommend that, when you get your two P60s after 5 April 2011, add the two gross salary amounts together, subtract £6,475 from the total and muliply the result by 20%. That should give you your correct Income Tax liability for the year.
Then add the two amounts of PAYE Deducted as shown on the two P60s. The combined PAYE amounts should be the same as the overall tax as calculated. If not, THEN contact HMRC to sort it out.

[SLCZ3]

Mr Whippy said:

The most important thing is that in two months it'll be the end of the tax year and you can look forward to it all working itself out, and a nice chunk of cash back.

OR, you could waste time trying to sort it out now...

Not sure if the problem will persist into next year, but you always pay the right amount of tax in the long run, so don't worry THAT much.

Dave

[Eric Mc]

SLCZ3 said:

And one from me too

NEVER assume that others will calculate YOUR tax liability correctly.

[Mr Whippy]

Eric Mc said:

And one from me too

NEVER assume that others will calculate YOUR tax liability correctly.

Well, sorry, maybe that was a bit wrong

What I mean is that the P60 will tell all, and make life easier.

Trying to work stuff out mid-term can be a ball ache. Being so close to P60 time it's probably worth waiting, then sorting, then getting the rebate if one is needed!?

Dave

[Eric Mc]

Which is essentially what I said as well.