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K tax code

Hi all,

Sorry if this is a bit of a waste of time question, but here you go anyway. I got my payslip today (first of financial year) and my tax code had changed to K1835 (it was the normal 0657L, or 0657L previously). On a pay of £2100.99 they took off £774.26 in income tax. I phoned payroll and the tax office and the man on the end of the phone could see it was wrong and amended it back to 637 (or whatever number it is) L.

My question is, how come they got it wrong? I've been in the same employment for a year, and my tax has been correct all that time. Would it just be a whoopsie, or should I dig deeper to find out why it was wrong?

The other thiing was, when I Googled K1835 as a tax code, it apparently doesn't even exist - I couldn't find any codes with more than 3 numbers!!

(At least the man said i should get about £450 back in next months pay, but it just means a skinto month i suppose).

That's all I suppose, and thanks in advance for any help / comments etc.

Shonimac

Comments

  • BoGoF
    BoGoF Posts: 7,099 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Can you not recall recieving a notice of coding earlier on in the year?

    This would have given a breakdown of how it had been calculated. A K code is when deductions exceed allowances but it would have to have been a mighty large deduction to end up with that code.

    It seems you are yet another victim of HMRC's new computer system
  • shonimac
    shonimac Posts: 13 Forumite
    I've never received anything, but I have a feeling they had the wrong address for me (updated it today when I called).

    Yeah the payroll person I spoke to said the tax people were making changes!! Has it been happening a lot??
  • BoGoF
    BoGoF Posts: 7,099 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Lots and lots !
  • shonimac
    shonimac Posts: 13 Forumite
    Poor show!

    Thank you BoGoF for your replies :)
  • Coeus
    Coeus Posts: 292 Forumite
    You must be really in the money to have a K1835. If I remember correctly a K code means your taxable benefits (which reduce the 647L code) are greater than your personal allowance of £6,475.

    By HMRC workings this means that your taxable benefits = £6,475 + £18,350 (K1835) = £24,825!

    Course this is an error just thought you might be interested.

    Kindest regards,
    Coeus.
    Hope For The Best, Plan For The Worst
  • shonimac
    shonimac Posts: 13 Forumite
    Coeus wrote: »

    By HMRC workings this means that your taxable benefits = £6,475 + £18,350 (K1835) = £24,825!


    My wage (before tax) is £22,000 ish a year. What are taxable benefits? (Please excuse the crap questions, but I really have no idea - no matter how much I read I still don't understand tax stuff lol)
  • Coeus
    Coeus Posts: 292 Forumite
    edited 29 April 2010 at 6:39PM
    Taxable benefits are the 'perks' of a job to which a monetary value can be assigned. The most common form of this is a company car and fuel expense being provided to you by your employer.

    Thinking about it, if a company provides you with a company car for business and personal use (and the fuel expenses) you don't have to pay i) repairs; ii) tax; iii) insurance; iv) fuel. If you weren't provided with this vehicle you would have to pay these expenses yourself. HMRC treat this as though the cost of all of these benefits is actually a form of extra income to you (which it is for you as you don't have to pay these). Hence they are going to tax you on this 'extra income', hence the term 'taxable benefits'.

    In your case HMRC somehow decided that you were provided £24,825 worth of benefits in a tax year hence adjusted your PAYE code to ensure you get taxed on this amount.

    For a guide to what benefits are taxable, visit http://www.hmrc.gov.uk/guidance/480.pdf.

    Your employer has to send of a P11D form to HMRC stating your taxable benefits. Have a glimpse at the form here http://www.hmrc.gov.uk/guidance/p11dguide.pdf. It will help you understand the concept.
    Hope For The Best, Plan For The Worst
  • jackieb
    jackieb Posts: 27,605 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    shonimac wrote: »

    The other thiing was, when I Googled K1835 as a tax code, it apparently doesn't even exist - I couldn't find any codes with more than 3 numbers!!


    My husband's tax code is K1321.
  • shonimac
    shonimac Posts: 13 Forumite
    Coeus wrote: »
    Taxable benefits are the 'perks' of a job to which a monetary value can be assigned. The most common form of this is a company car and fuel expense being provided to you by your employer.

    Hahahahaha :) I'm a mental health nurse in a an acute psychiatric inpatient unit. I don't even get a uniform allowance, let alone a company car lol :rotfl:

    Thank you for all your replies :)
  • Zazen999
    Zazen999 Posts: 6,183 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Shoni; if it is going to cause you financial hardship; please at least ask for the difference to be paid to you in an interim arrangement. You should not be out of pocket for something that should be screamingly obviously wrong!
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