Tax code ends in 'T' what does it mean?

HMS · 2 March 2011 at 11:25AM

Hi All

I'm a student with a PT/casual job (different amount of work each month earning £500 -£1000 and so far £5300). My tax code on my pay slip is 644T. So far this year I haven't paid any tax, but have paid NI contributions.

I just looked this up on the web (HMRC) and it says "If there are any other items we need to review in your tax code, for example the income-related reduction to the Personal Allowance (read more in the section 'Effect on your tax code if your income is above £100,000')."

I'm a little confused... is the 'T' code right for me? What are the 'other items we need to review'?

I'm about to start FT work again in Aug.

Mikeyorks · 2 March 2011 at 11:56AM

644 is just a fraction off the basic code for this year - normally 647. Do you not have a P2 (Coding Notice) which would explain the missing personal allowance of £30 (only translates to £6 in tax per year). As that probably also explains the suffix 'T'.

HMS · 2 March 2011 at 12:21PM

Not aware of having the P2, but will take a look. Thanks for your help.

ceeforcat · 3 March 2011 at 5:57PM

Mikeyorks - maybe you are not old enough to remember but a 'T' code was simply a code which was not to be increased after budgets or at the start of the tax year usually in the example where one had two jobs and alllowances where split e.g. two jobs codes 347L and 300T. If allowances were increased the instruction could be to increase all 'L' codes by whatever (or 'P', 'V' , 'H' codes in my day). 'T' codes were never to be increased. Obviously one would not wish for both codes to increased and this is how they did it. Feel old now!

Mikeyorks · 3 March 2011 at 6:04PM

I'm old enough!

..... unfortunately.

But I don't remember that. The 'T' now simply denotes there is something in the Code to be reviewed. Recently it also has been extended to include Codes where the personal allowance is set to be decreased as income exceeeds £100k

ceeforcat · 3 March 2011 at 6:10PM

Yes - but if you tkink about it logically all those years ago when the instructions went out to increase all the codes with various suffixes by different amounts. Basically if you did not want the code increased one put the employee on a 'T' code. The best example was 0T - always reminded that this was 'nought' T not letter 'o' T

Perhaps it has all changed now?

Mikeyorks · 3 March 2011 at 9:59PM

ceeforcat wrote: »

Perhaps it has all changed now?

I think you're going back a while! A lot of it has changed - whilst a remarkable amount of the fundamentals remain. A read about the Code basics here ..... there'll be a test later.

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

On the basis that HMRC issue close to 20m P2's annually - I don't think too many Code changes are issued based on a prefix now. The last I remember was the £600 increase in mid year after the mess of the 10% withdrawal back in 08-09 (?)

Gas_Powered_Toothbrush · 3 March 2011 at 11:37PM

T codes could also be issued on request in the days of married couples allowance and the like if you didn't want your employer to know your personal circumstances.

Tax code ends in 'T' what does it mean?

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