New Tax code & massive deduction

DivaMomof2

Hi all

just got my paycheck and found HMRC have taken out an additional £700.

Compared my payslip to the previous month and the new tax code is K1565 NONCUM (the old was 1257L NONCUM).

In mid August I switched jobs and went from £87k to £107k per annum. I got paid twice in that month from both employers. 

I visited the HRMC website and had them re estimate my tax by putting in my earnings so I’m now in wait see mode. Doesn’t help that there’s a 4 day weekend coming up

My question is does £700 seem correct for one month? If incorrect will I get a refund relatively soon or have to wait till Apr 2025. 

Thanks in advance.

Dazed_and_C0nfused

DivaMomof2 said:

Hi all

just got my paycheck and found HMRC have taken out an additional £700.

Compared my payslip to the previous month and the new tax code is K1565 NONCUM (the old was 1257L NONCUM).

In mid August I switched jobs and went from £87k to £107k per annum. I got paid twice in that month from both employers. 

I visited the HRMC website and had them re estimate my tax by putting in my earnings so I’m now in wait see mode. Doesn’t help that there’s a 4 day weekend coming up

My question is does £700 seem correct for one month? If incorrect will I get a refund relatively soon or have to wait till Apr 2025. 

Thanks in advance.

Without details of your taxable income etc it's impossible to know if the £700 is paying tax you owe, too much or even not enough (as in you will owe more not that your employer made a mistake).

Do you file Self Assessment returns?

Have you checked what your tax code will be in the 2024-25 tax year?

Can you provide a breakdown of how the K1565 code was calculated?

Chances are you will have (or still do) owe tax as there are two things you have posted which point to that,

Being paid twice in one tax month
Earning over £100k (if that is the case for 2023-24)

DivaMomof2

Dazed_and_C0nfused said:

DivaMomof2 said:

Hi all

just got my paycheck and found HMRC have taken out an additional £700.

Compared my payslip to the previous month and the new tax code is K1565 NONCUM (the old was 1257L NONCUM).

In mid August I switched jobs and went from £87k to £107k per annum. I got paid twice in that month from both employers. 

I visited the HRMC website and had them re estimate my tax by putting in my earnings so I’m now in wait see mode. Doesn’t help that there’s a 4 day weekend coming up

My question is does £700 seem correct for one month? If incorrect will I get a refund relatively soon or have to wait till Apr 2025. 

Thanks in advance.

Without details of your taxable income etc it's impossible to know if the £700 is paying tax you owe, too much or even not enough (as in you will owe more not that your employer made a mistake).

Do you file Self Assessment returns? 

Have you checked what your tax code will be in the 2024-25 tax year? 

Can you provide a breakdown of how the K1565 code was calculated?

Chances are you will have (or still do) owe tax as there are two things you have posted which point to that,

Being paid twice in one tax month
Earning over £100k (if that is the case for 2023-24)

Thanks for responding my responses are below in bold



Do you file Self Assessment returns? No

Have you checked what your tax code will be in the 2024-25 tax year? Website says from 29 Feb 2024 will be K1565X

Can you provide a breakdown of how the K1565 code was calculated? Says on HRMC website that I have untaxed income more than my tax free amount. £15,650 needs to be added to pay or pension so extra tax can be collected. Pay is based on pay in each pay period.

Website also says “you have not paid enough income tax this year and currently owe £617.89. We have reduced your tax free amount by £15661. This means you will pay more tax until 5 April 2024 so we can collect the £617.89 owed.”

This indicates that it is a one off maybe?

Chances are you will have (or still do) owe tax as there are two things you have posted which point to that,

Being paid twice in one tax month
Earning over £100k (if that is the case for 2023-24) 

I hope not I submitted a request to have my income recalculated and it came out 8k less than their estimate so I’ll see if that changes anything. I just feel that taking out a large sum with no notification is unfair.

Ferro

It does indeed look like a ‘one-off’. Can you confirm. as requested, the tax code to be operated NEXT tax year - 2024/25, not 2023/24. 

Obviously the code for 2024/25 cannot be operated ‘from 29th February 2024’.

Dazed_and_C0nfused

Have you checked what your tax code will be in the 2024-25 tax year? Website says from 29 Feb 2024 will be K1565X

Can you provide a breakdown of how the K1565 code was calculated?  Says on HRMC website that I have untaxed income more than my tax free amount. £15,650 needs to be added to pay or pension so extra tax can be collected. Pay is based on pay in each pay period.

Website also says “you have not paid enough income tax this year and currently owe £617.89. We have reduced your tax free amount by £15661. This means you will pay more tax until 5 April 2024 so we can collect the £617.89 owed.”

This indicates that it is a one off maybe?

Chances are you will have (or still do) owe tax as there are two things you have posted which point to that,

Being paid twice in one tax month
Earning over £100k (if that is the case for 2023-24)

I hope not I submitted a request to have my income recalculated and it came out 8k less than their estimate so I’ll see if that changes anything. I just feel that taking out a large sum with no notification is unfair.

That is your tax code for the current tax year, you will have a new tax code for the 2024-25 tax year.

It is unusual for HMRC to make a large adjustment like that so late on in the tax year.

But ultimately you will either owe less from the extra deducted this month or get a refund if you didn't need to pay some (or all) of the extra.

The priority now is to check your 2024-25 tax code and also make sure HMRC have used a realistic estimate of your earnings for the forthcoming tax year - you will have a much better idea of what these will be than any estimate HMRC come up with.

DivaMomof2

Ferro said:

It does indeed look like a ‘one-off’. Can you confirm. as requested, the tax code to be operated NEXT tax year - 2024/25, not 2023/24. 

Obviously the code for 2024/25 cannot be operated ‘from 29th February 2024’.

Thank you…

Website states tax code from 6 Apr 2024 is K583 and “We estimate you will pay £3,607 less tax next year”.
ill wait for them to re estimate 23/24 based on the info I sent from my payslip.

Grumpy_chap

DivaMomof2 said:

Hi all

just got my paycheck and found HMRC have taken out an additional £700.

Compared my payslip to the previous month and the new tax code is K1565 NONCUM (the old was 1257L NONCUM).

In mid August I switched jobs and went from £87k to £107k per annum. I got paid twice in that month from both employers. 

I visited the HRMC website and had them re estimate my tax by putting in my earnings so I’m now in wait see mode. Doesn’t help that there’s a 4 day weekend coming up

My question is does £700 seem correct for one month? If incorrect will I get a refund relatively soon or have to wait till Apr 2025. 

Thanks in advance.

Something similar happened to me, so I ended up with a K1648 tax code.
it is to do with the way HMRC calculate the withdrawal of personal allowance once >£100k.
My job change was also August.

OP was earning £87k, so £7k per month for 5 months.
OP now earning £107k, so £9k per month for 8 months.
The double pay in August is why that shows 13 (not 12) months for the year.
There must have been a delay in RTI process somewhere, so when the double pay processed for August, it triggered a forecast and back-tax calculation to be covered in March (as the only remaining pay period in the tax year).
It is a big hit in tax caused by the being paid twice and the HMRC computer assuming that will happen every month.

The error in my tax code is proportionally more significant as my total income for the year will only be around £14k but I have suffered the tax in the mean time.  I am looking forward to the refund.

Insufficient information from the OP to say whether the £700 is the correct tax or not.  It will resolve when the full year tax and income is verified to HMRC.

Going forwards, the OP would be wise to consider the £107k putting them right in the 60% (62% including NI) (assuming England) effective marginal band and measures to bring ANI below £100k.  Pension being the most obvious.

penners324

On the face of it, it looks correct. Being paid twice in 1 month can lead to significant tax being owed.