Changing Tax Codes

lucylu79

Help!
I received my payslip for this months earnings and noticed my tax I pay on paye has increased. On closer inspection, my tax code has changed.

Some figures for you guys to help me try work out why.....
I earn £23,000 pa. equates to £1900 a month.
I started my job in April this year. My tax code was 647L. Previous to this job, I was earning minimum wage in a part time job.

PAYE and NI used to equate to about £430 on tax code 647L.

This month PAYE has taken £747 off me, and that is not inclusive of NI. The new tax code is 293L.
:mad:
The paycheque just before christmas has taken £900 off me in tax - surely this can't be right! It is an absolute disaster as we just about manage to live off what I used to bring in, and now I am £400 worse off!

I do get a company car, as I do a lot o travelling for work. But I have had this all the time I have worked for the company, so it is not a change as such.

I have done a tax calculator thing on the internet and based on my numbers, it said I should pay 300 ish on tax, but - £747 ????

Can someone tell me - is this likely to be right? Is it a mistake? I have got to stew about this now all weekend, and I don't know what to do. No Christmas in our house this year.....

Anyhow - anyones help would be appreciated. Thank you.

dmg24

Are you allowed to use your company car for personal use?

lucylu79

Yeah - but it is not paid for - we have to log our personal mileage and reimburse cash for it on our expenses form.

dmg24

lucylu79 wrote: »

Yeah - but it is not paid for - we have to log our personal mileage and reimburse cash for it on our expenses form.

It is still a taxable benefit. You will need to check with payroll/ HMRC if this is the reason for the change.

lucylu79

I will check with them on monday - but I just hate it that they are going to take literally half of what I earn off me - It just seems unjust. Thanks for your reply anyway.

chrisbur

Normally when a code is dropped this mutch part way through the tax year it would be applied on a month 1 basis, but this is being applied on a cumulative basis. Check with payroll to see if this was an error and should have been month 1. Also you should have had a notice of coding this would also say in the notes if it should have been month 1.

p00hsticks

Did you get a P11D Benefits in kind form from your employer earlier this year ? They typically come around June time I think. This is where your employer notifies both you and HMRC of the taxable benefit of any perks you have had over the last tax year, such as private medical care, company car etc. A reduction of tax code such as the one you describe is often made to cater for such benefits, but you should have got a coding notice from HMRC to explain the reasons for the change.

lucylu79

I have not had a notification of any kind of change in tax. And the only benefit i have had is the car, which i have had since day 1.
Even if the code change is correct, the tax calculator says that the amount of tax paid on my salary and that code should be about 300, not 700!

Thanks for all your replies!

chrisbur

lucylu79 wrote: »

I have not had a notification of any kind of change in tax. And the only benefit i have had is the car, which i have had since day 1.
Even if the code change is correct, the tax calculator says that the amount of tax paid on my salary and that code should be about 300, not 700!

Thanks for all your replies!

Tax calculators only work if everything stays the same all year, in your case a tax code reduction has been applied part way through the year on a cumulative basis, that is it has taken the extra tax for that month and for every other month back to April 6. As I said before changes like this are usually applied on a month 1 basis to avoid this happening.

Loopy_Girl

It would need to be a whopping big car for her tax code to drop so dramatically!!!

My company car is worth 10k and the P11D only has the 'cash value' as £716