Advice on tax code please PAYE

mikeyboy

Thanks Pam,

OMG my brain has melted lol.

It sounds like I am potentially in a very big hole here.

Is there anyway of working out what the net effect of getting the right deductions will be on my pay? Ie how much extra will be deducted each month?

System

The cash equivalent of your car and fuel in 09/10 = £2069 + £1672 = £3741 and if you were a 20% taxpayer that would equate to an underpayment of £3741 x 0.20 = £748 09/10.

If that was collected over the 11/12 year that would be £748/12 = £62.35 tax extra per month.

But then you have to factor in also the extra tax due on your car (we'll forget about the fuel since you aren't using it).
In 09/10 it was £2069 which was not for a full year so we could estimate that in 10/11 the cash equivalent might be £2069/10months x 12months = approx £2500 and at 20% that means an extra £500 tax due for that in 2010/11. That equates to £41.66 per month.

Assuming you don't ask for the 09/10 underpayment to be spread over more than a year HMRC would be collecting an extra
£748 + £500 tax from you in 11/12 = £1248 or £104 per month.

Plus the potential underpayment for 10/11 which would be the number of months at £41.66 per month that your employer operated £647L before HMRC changed your tax code. Basically you are currently running up the 10/11 underpayment alone of £41.66 per month for the car whilst waiting for HMRC to process the P11D. You also need HMRC to be made aware that you are not making use of the fuel card to ensure that they don't include that in your code too. A letter from your employer confirming that would help.

mikeyboy

Thanks Pam, appreciate all your helpmwithnthat, I think I understand better now, it might not be quite as bad as I thought.

I'll persist with phoning the tax office this week and hopefully get to the bottom of things.

Thanks again