heather8 wrote: »
I agree that tax codes are very confusing for some people. Having worked for HMRC for 29 years (I no longer work there), I would add that they have spent loads of money and done lots of trials, to try and make the P2(notice of coding) easy to understand.
The most important thing that people need to do, is check to see if it contains the correct information.
As others have said most people will have 647L This measn 6475 allowances are given over the year (free pay), so you are allowed to earn roughly £539 per month before you pay tax. Pensioners (over 65) may have a higher personal allowance. If they have lots of other income then no age allowance may be due.
If you only have 1 job/pension and your code is BR (basic rate) DO (40%) or anything ending with an X for example 647LX, then you need to make sure its right, as you could be paying too much tax. I know its a pain to try and get through to the Contact Centre to check, but ring up and check, or pop into your localtax office, if you still have one. (They have closed lots of smaller ones, so they may have reduced operating hours) and make an appointment to get it checked.
If you receive benefits in kind in particular a company car, make sure that you tell HMRC you have this or if you have changed it that you tell them, otherwise you could be either underpaid or overpaid. The benefit for car will be shown as NCAR in the deduction side of your P2.
...could cost £10,000s more
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