New Tax Code??

Stirling

Hi,

I recently realised that I had been on and emergency tax code BR for 3 years. I managed to get a rebate and have it corrected to 647L back in April09.

Now they have just sent me another letter stating that it's been changed again to 582L M1??

Is this a standard tax code?

Thanks!

Any

No it isn't.
Do you get any benefit from your employer? Health insurance, company car ...

fengirl_2

There is something in the code which is reducing your personal allowances and this will be shown on the notice of coding.

trevormax

The fact that your code has been reduced and you have been put onto a month 1 code means there is a potential underpayment of tax for 09/10. If you were put onto a cumulative code, this would not happen as you would pay a little extra tax in the month they action the new tax code. However, they will sometimes put you onto a month 1 code to prevent you paying a massive amount of tax in the month they action the new code.

You might get away with the underpayment depending on when your employer actions the new tax code. If your employer actions the new tax code for Augusts pay, you will only be underpaid by about £43. If they wait and action it in Septembers pay, then you will be underpaid by £54.

If a person underpays tax by £50 or less, then HMRC will not persue the underpayment and will just write it off. I'm not 100% sure if it's the same with potential underpayments or not, maybe Fengirl could confirm but I think they treat them in the same way.

fengirl_2

No, you dont get away with potential underpayments (MP's expenses have to be funded somehow). But I think the OP's concern was WHY his code has been reduced.

trevormax

fengirl wrote: »

MP's expenses have to be funded somehow

lol dont forget the fat cat bankers.

Indeed op was asking if the tax code was correct, just thought I would give them a heads-up on the fact they will be underpaid:)