Tax Code Change Confusion, Please Help

_danny__2

hi all

i've just had a very nasty shock, and i'm (more than) a little concerned.

i started my current job in September 2008, and i've always had the tax code of 603L. i got paid today and my monthy take home has gone down a massive £207.23. i checked my new tax code and it's now 647L.

my knowledge of the tax system is, at best, non existant, but i thought that -- put very, very basically -- that change in tax code would suggest that i can now earn £44 pounds more, tax free, than before.

so firstly, should my pay have gone down, or up? and secondly, if it's the former, should it really have gone down by *that* much? the reason i'm a member of this forum is that i have massive debts that i'm desperately trying to clear, and to find out all of a sudden that my take home has gone down by over £200 feels like the end of the world at the moment.

any help would be much appreciated.

thanks

danny

aitch-aitch

A tax code increase of 44 means effectively gives you £440 more of tax free money. So no this doesn't account for the decrease. You will also benefit from the change in tax bandings but this still doesn't seem to account for the decrease in your net pay

My pay went up by £29 this month as a result of the change in tax code and bandings.

The only other reason I can think is that you may have been on a week 1 / month 1 basis for tax in 2008/09 - this should be clearly shown on your P45 / P60 if you have one.

Your payroll dept should be able to answer your query.

mrkbrrws

You appear to be on the basic personal allowance code (647L) which did increase by 44. That means you can now earn £440 more before you start paying tax.

Is it the Income Tax that increases by about £200 on your payslips and is there anything else unusual for March or April?

Any

And one more question - you say you started your job Sept 08. Were you working before that date??

fengirl_2

If your first job in 08-09 was from September, then you will have had 12 months tax free allowances in the space of 6 mths. Now you will be working for a full tax year, your tax free allowance needs to cover a full tax year, so it will look as if your tax has doubled.