K tax code

jackieb

I'll explain this as best as I can.

My husband has been working overseas. Last year he saw an accountant and claimed back tax (due to double taxation?) He was due £12000 (not exact figures as I don't have papers to hand). Over £5000 was deducted for tax before he got it back - he got back just over £7000. In August, just after the rebate was paid, my husbands tax code was changed to K672.

How long will this K tax code be in place? His collegues who also claimed the rebate got the whole £12000 back, and their tax code never changed, and they've done this for years. My husband wasn't sure whether the accountant he saw knew much about double taxation.

It just seems that with the £5000 deducted from the £12000 before he got it, and the subsequent K tax code, it wasn't worth claiming for the double taxation.

On his P60 for 2008/09 he made £60000 (not including rebate) and was taxed over £18000 (not including the £5000 paid on his rebate).

He should also be claiming again this year, but his tax papers haven't came back from Russia yet.

System

You haven't supplied enough information about each individual year. The Kcode applied last August presumably applies to the 08/09 tax year and so should change in 09/10 but that depends on what your husband puts on his 08/09 tax return.

If you think the accountant made an error which meant your husband did not receive as much of a rebate for 07/08 as he expected then you need to correct that error asap. If you can tell us what was on that tax return we might be able to give you clearer advice.

jackieb

I would need to look out his paperwork for that.

This is a thread I posted last year (his tax code has actually came down since then). The £12+k had actually been included as benefits in kind before he'd actually claimed it back. Can they do this? http://forums.moneysavingexpert.com/showthread.html?t=1089173&highlight=

John_Pierpoint

As an executor with a similar "K" code problem on behalf of the deceased, can I disagree with Fengirl?

If there is some trivial amount of tax owing by all means collect it through PAYE if the tax payer understands and agrees.
In my family, I have come across two members who are still alive. They ticked the box to not have it put on their notice of coding, only for the notice of coding to be changed with little warning, resulting in them going overdrawn and bouncing direct debits.

The problem I have is that the late Mr Dog had so little PAYE income that collecting the tax on his "over 50K" nest egg interest has not been possible, so the tax man has tried to slaughtered his minimal company pension and stuck him on self assessment (and finally just for fun appears to have got his age allowance wrong or has that been doctored too to collect a previous year's tax?)

There is a lot to be said, especially with current interest rates, for getting the tax right year by year, rather than rolling it over so the whole exercise becomes like trying to settle a credit card debt.

System

John_Pierpoint wrote: »

As an executor with a similar "K" code problem on behalf of the deceased, can I disagree with Fengirl?

If there is some trivial amount of tax owing by all means collect it through PAYE if the tax payer understands and agrees.
In my family, I have come across two members who are still alive. They ticked the box to not have it put on their notice of coding, only for the notice of coding to be changed with little warning, resulting in them going overdrawn and bouncing direct debits.

The problem I have is that the late Mr Dog had so little PAYE income that collecting the tax on his "over 50K" nest egg interest has not been possible, so the tax man has tried to slaughtered his minimal company pension and stuck him on self assessment (and finally just for fun appears to have got his age allowance wrong or has that been doctored too to collect a previous year's tax?)

There is a lot to be said, especially with current interest rates, for getting the tax right year by year, rather than rolling it over so the whole exercise becomes like trying to settle a credit card debt.

?? Fengirl hasn't posted on this thread so far.:huh:

John_Pierpoint

fengirl wrote: »

He can pay the tax off in one lump sum, but I am always in favour of owing the taxman - then you are the one in control - especially if the underpayment is in your code number, when interest won't be charged.

She did last year!

fengirl_2

I have been unfairly maligned for answering a different question with different circumstances to Mr Dog's! Why not blame me for the 'ecomonic downturn' as well?

fengirl_2

And MP's fiddling their expenses...grumble, grumble.

John_Pierpoint

fengirl wrote: »

I have been unfairly maligned for answering a different question with different circumstances to Mr Dog's! Why not blame me for the 'ecomonic downturn' as well?

Absolutely no "blame" intended; normally your postings are brilliant and right on the nail.
But in this case it is probable that the original poster and her husband don't really understand how the system works (or the clerk processing the return has got it wrong). The muddle started last year and it is getting worse; this year's thread leads on from last year's. Had the OP and husband got to the the bottom of his Russian income and the double taxation involved last year, this year's compounded muddle would not have occurred.
I have had three potential "disputes" with my tax office in my life time. In two cases what I was told was incorrect and the tax people agreed with me eventually. In the third case I pressed on making a complete fool of myself because I had misunderstood the way the tax system worked. (I'm pleased to say someone took the time to quote chapter and verse and explain why I did owe the tax, all 30 quid of it.).
I won't try to take over this thread with the details of Mr Dog's income tax, so far I've simply asked his tax office why he has not had the benefit of his age allowance for 07/08 when he did get it for 06/07. Let us hope I will get a sensible reply.
I think we can both agree that the tax system, coupled with tax credits, has become a complex irrational monster that the vast majority of its "victims" don't understand?

John

PS Is the original poster's husband's problem versus that of a colleague, possibly something to do with not being abroad long enough, or being back in the UK more than 90 days (nights?) per year?

fengirl_2

I agree, I think we need to satisfy ourselves that the tax owed by the husband of the OP is correct, but we can't do that without more info.

jackieb

Thanks for your replies. I guess he'll just have to ask around to see which accountants his collegues used., and to chase up the Russian office for his paperwork. I'll let you know how he gets on.

Dh has worked there for 3 years. He was out of the UK for about 30 days at a time, then home for about 26 days. Everyone over there is on the same shift rota. So nothing different there.