Emergency Tax Code

MissMotivation

Hi

My tax code has been 503L for as long as I can remember, I have just read somewhere that this is emergency tax, can anyone confirm this? Seems odd that I would have been on it for this amount of time so just wanted to check

Bossyboots

No, 503L is not emergency tax. Here is an explanation of tax codes http://www.direct.gov.uk/MoneyTaxAndBenefits/Taxes/BeginnersGuideToTax/BeginnersGuideToTaxArticles/fs/en?CONTENT_ID=4015472&chk=iIHw8P

teapot2

MissMotivation wrote:

Hi

My tax code has been 503L for as long as I can remember, I have just read somewhere that this is emergency tax, can anyone confirm this? Seems odd that I would have been on it for this amount of time so just wanted to check

Emergency tax is usually listed as BR or some variation of that. 503L is the code that came in at the beginning of the this tax year when the allowances were increased. Before that it was something like 489L. If you feel that you are on the wrong code after you have had a look at the link above you can ask to be re-coded.

oldwiring

See http://www.hmrc.gov.uk/employers/rates_and_limits.htm#1c

The emargency tax code is indeed 503L but it is worked on a week 1 or Month 1 basis. BR is most often used for anyone whose allowances are used up against one income source and who does not fall in to higher rate tax

tiamaria

My son's tax code is BR but he only has one part time job,he has no other income. It's his first job & he's gone straight on to paying tax under this code?
He's had no allowances at all.

Is this right?

weaver

oldwiring wrote:

See http://www.hmrc.gov.uk/employers/rates_and_limits.htm#1c

The emargency tax code is indeed 503L but it is worked on a week 1 or Month 1 basis. BR is most often used for anyone whose allowances are used up against one income source and who does not fall in to higher rate tax

Totally agree with this - 503L is followed by wk1/mth1 is confirm it is an emergency.

weaver

tiamaria wrote:

My son's tax code is BR but he only has one part time job,he has no other income. It's his first job & he's gone straight on to paying tax under this code?
He's had no allowances at all.

Is this right?

by the information you have supplied I would say this is incorrect - he should be on 503L or 503L wk1/mth1 (emergency )

The only difference between the 2 code variations is that 503L is a cumlative code (meaning the current money you can earn before paying tax is 96.91 x by the current week you are working in i.e 96.91 x 30 means from 5th april 2006 to the end of week 30 (this week ) you can earn a total of 2907.30 before you pay any tax etc.
if your code is 503L wk1/mth1 all the money you earn over 96.91 is taxed at either 22% or 40% and this amount is used each week and is not cumlative - that is every week you deduct 96.91 from your earning and what is left multiply by 0.22 (22%)and deduct 4.97 (week 1 free pay )
e.g £150 less wk 1 amount 96.91 = 53.09 x 0.22 (22%)deduct 4.97 (free pay )= 6.70 tax to pay.

I would suggest 2 options

a) He will need to contact local tax office and ask them for a code and talk to them about the code that he is on.

b) his part time employer can submit a completed P46 to the tax office - they will then send out a tax code for him. He will need to talk to his employer about submitting a P46.

Many small employers are unsure of PAYE systems (it is a minefield for anyone not used to it )and he may have to ring the local tax office.

Be asured that once he does get a code any overpaid of tax will be refunded to him.

Also please note if he has worked before or has a student loan this will affect the tax codes operated for him, so this may explain the code - the local tax office will advise him - because of data protection he will need to ring or call in to see them. He will need his NI number.

Mikeyorks

tiamaria wrote:

Is this right?

It depends on what he put on the P46 he should have completed when he started the p/time work.

If he didn't tick any of the boxes (or ticked box 'C') - then the employer is correct to put him on BR.

But it sounds as though he should be on Emergency Code - pending issue of a correct code by HMRC.

He - you can't do it for him - needs to take it up with HMRC and possibly complete a (further?) P46 if one hasn't been completed / it was completed incorrectly.

There's a compare of BR and Emergency Codes on this link - but some of the rationale behind what a new employer should do is a bit subtle. And if you don't know what was on the P46 (if indeed there was one) it's impossible to say if it is the employer operating incorrectly.

http://www.hmrc.gov.uk/manuals/pommanual/pomcod/pomcod02103.htm

jem16

Use of the BR code seems to happen too often. My son handed in his P45 when he started his first proper job on 2nd October - it clearly showed 503L. He was paid on the 15th October, although the payment didn't go in properly as by 3pm nothing showed up in his account. Apparently payments were paid through chaps and using the BR code.

We phoned the tax office who said nothing was through yet and to give them another ring in 2 weeks.

tiamaria

Thank you for your replies, they are appreciated.

He's not worked before or had a student loan .

He works for a very large company so by rights they should know what they're doing.

He's not sure if he completed a P46 or not but says he wouldn't have ticked box C.

He plans to talk to his employer but if nothing is sorted in a couple of weeks, I'll get him to call the tax office.

It's very reassuring to know he will get this money back as he is in full time college so can't earn very much.

thanks again

ctm_2

tiamaria wrote:

He plans to talk to his employer but if nothing is sorted in a couple of weeks, I'll get him to call the tax office.

Why? His employer can do nothing. They are unable to change his code now. They can only change his code when they receive notification from HMRC to change the code.

By far the quickest way to get it sorted is for him to ring his tax office.