Tax codes

burkey365

how do you read a P60 to decide if you are due a rebate because for example if the code is 647L and you earn £9000 for the year does that mean your not due a rebate, or are you due a small amount back...in laymens terms how easy is it to work out

BoGoF

Whatever your P60 shows as income deduct £6475 from this and then tax the balance at 20%, if you have paid more tax than the 20% figure you may be due a refund. This assumes your P60 shows all your income for the year.

scottishblondie

Very easy. The tax code 647L means that you are allowed to earn £6475 tax free, so the remaining £2525 (assuming you earned exactly £9000) will be taxed at the basic rate of 20%. So you should have paid £505 in tax. If you have paid more than that then you should be due a tax refund.

burkey365

so after deducting from the total you then just take away a fifth(20%) and the rest should be sent back to me is that right....thanks for your help in anticpation

BoGoF

Tell us what your total pay and tax are from the P60. Also does the tax code 647L have a 1 or an X after it ?

Valli

burkey365 wrote: »

so after deducting from the total you then just take away a fifth(20%) and the rest should be sent back to me is that right....thanks for your help in anticpation

no

Take your £9000
subtract your tax free allowance for the year 6475

this leaves £2525 on which you should have paid tax.

20% of that is £505.00

on your P60 there will be a figure for TAX PAID.

if this is £505.00 you have paid the correct amount of tax.

if it is LESS than £505 you haven't paid enough and would owe them some. You would work that out by subtracting the tax paid from £505 and that's what you would owe.

if it is MORE that £505 you will have paid too much tax. In that case they would owe you an amount which you would calculate by taking the amount of tax paid as shown on the P60, subtracting the £505 you actually should pay for the tax year and that's what you would get back.