Idiot question (probably), lower tax code, better or worse?

Max_Headroom_3

OK I'm sure this is the simplest question in the world, sorry.

But I've just been informed via a new coding notice that my tax code is changing from K168 to K134.

So will I pay more tax, or less tax?

I know I should be able to work this out, but looking at the coding notice it would appear that my benefits taken out of my personal allowance... Oh !!!! it I don't know! :mad:

I bet I'll end up paying more though, not often these things ever go in my favour!

rheme

Think it means you will be paying more.

See this link here.

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

CLAPTON

normally an decrease in tax code means you pay more BUT you have a K code which means your coding is negative so in this special case it means you will pay LESS tax

so you will have 340 x 20% = £78 less tax.

Max_Headroom_3

Wow, an instant (well, end of April) £6-50/month pay rise, fantastic!!

Certainly better than a reduction that's for sure.

Good news, thank you both.

Mikeyorks

Max_Headroom wrote: »

(well, end of April)

Implying this is your new code for 09-10?

Basic rate Personal allowances go up from £6035 to £6475 .... an increase of £440. But, in your case, the increase is only £340 (meaning you will pay less .... but most will pay less by £440 x 20% = £88.

Not a remarkable difference, but the fact it's precisely £100 out looks a bit odd. First check you gave us the correct 'before' and 'after' codes? If you did - check the P2 (Coding Notice) against last years .... should explain the discrepancy?