Tax code K363????

cazlina

Hi looking for a little advice, received PAYE coding notice today and won't be able to speak to HMRC till monday!!!

PAYE coding notice says my tax code for 2010-2011 will be K363, not really clued up on tax codes but my impression from it is that i am going to be negatively taxed as if i've underpaid this year. My tax code has always been the same 647L, i have checked my payslips and have been paying 20% tax every month so don't understand why i have recieved this code?????

Mikeyorks

The underpayment can't be for the year not yet closed? More likely from a previous year. The Code number is a 'negative' code ..... you have Minus £3630 allowances. If it's purely reduced for an underpayment ... then it must have been close to £2000 ........ as they've reduced your allowances by £10,000 @ 20% = £2000.

The P2 (Coding Notice) should explain the reason?

cazlina

Thanks for reply, P2 confuses me even more.

It says "we have to see if anything should reduce tax free amount. The way the tax tables that employers use work means employer will tax you at 20% on £37400. Without this adjustment you would pay too little tax at 40% and too much at 20%, so that at the end of the year you would owe tax. This should sort it out. Please phone if you would like to talk this through."

I don't earn anywhere near £37400, so not sure where there pulling these figures from!!

Mikeyorks

That's a curious one ...... and completely neutralises my earlier reply, where I picked up on your implication of an underpayment.

I had something similar to this several years ago .... where HMRC made what was termed an 'HR' reduction in my coding. They had spotted a significant sum sitting in my Bank account ....... and made a deduction which I later calculated would have been the sum that money would have earned at the interest rate current at the time (and would have pushed me well into 40%). As it happened it was the proceeds of sale from my primary residence .... and which I wasn't going to be using for a few months. And I'd parked it a newly opened annual Websaver in order no interest was paid that tax year ... so they were getting too cute, and restored the full personal allowance.

If you have no significant Savings / Investment potential current??? .. then I'm fresh out of ideas. And you need to talk to them.

But do post the result?

cazlina

Yeh me still confused too, just went thru my files and found all my P60 for last 7 years and i have paid full tax amount every year. I do have some savings probably adds up to £12,000 between a couple of accounts but i haven't received any interest on them this year.

Thanks for help, hopefully get an answer on monday from them.

John_Pierpoint

I've just had code 944L replaced with 647L
"Once XXX Pension Trustees use the new code, you will get a proportion of the new tax free amount (we tell them to use your new code on a special basis)..........."

In my case I have a feeling this is something to do with bunging a lump sum into another pension scheme partly to avoid 40% tax & partly to have a sum currently outside my estate, should I kick the bucket in the next 11 years.

But it will all come out in the wash, when my next SA return goes in.

Perhaps the new HMRC computer system is too "clever" for its own good?.

Mikeyorks

cazlina wrote: »

Yeh me still confused too,

It does sound a bit like a fishing expedition from them? Post back how you get on .... I'm curious.;)

Mikeyorks

jimmo wrote: »

If you are prepared to share details maybe we can help you

Post #3 ??

cazlina

hi other than the above which said

note 2 "we have to see if anything should reduce tax free amount. The way the tax tables that employers use work means employer will tax you at 20% on £37400. Without this adjustment you would pay too little tax at 40% and too much at 20%, so that at the end of the year you would owe tax. This should sort it out. Please phone if you would like to talk this through."

note 1 just says everyone under 65 are entitled to £6475.00 for tax year

In the worked out section they deducted £10115 (adjustment to basic rate band) from my personal allowance of £6475 to arrive at the figure of minus £3640.

System

It could be because an old HR signal is set on your record on the new PAYE system that has migrated across from the old PAYE system.

Gobbledegook I know but a problem/glitch which is only now appearing on the new system with the release of 2010/11 codes. Give your tax office a call on Monday and tell them you are not a higher rate taxpayer and they will readjust the code

Tarasam

Sounds like a basic rate restriction has been put in your code as if you have two souirces of income.
There are lots of instances at the mo with codes for the coming tax year due to the new computer system that was installed in the summer, please call HMRC and get us to sort it out for you, it will be corrected instantly.
If your code notice is for 10/11 tax year and you are able to wait to contact unitl mid Feb I would suggest you wait as HMRC have at least 250 calls in the queue at any one time due to the nearing self assessment deadline. These codes have NOT YET gone to employers / pension providers.