How do i know my tax code is right?

wilkies5

After he left college, my son started work, on a casual basis, last summer. He isn't currently paying tax or NI as he earns nowhere near the personal allowance of £6470, and certainly won't have reached that figure by April 2011.
He has, in fact, to date, only earned £1761.
He has just been sent notification that his tax code has gone down to 101L !! Am I right in assuming that it doesn't matter what his tax coding is, as long as he doesn't have tax/NI deducted? Or are the tax people likely NOW to start deducting it, seeing as his coding has been slashed?

Who does he speak to and why would a young man of 19 have such a harsh reduction of his personal allowance?

Some advice would be really appreciated. Thank you so much...you always manage to reassure me!

CLAPTON

what explanation of the tax code is given in the notification?

when you say he is working on a casual basis do you mean for several employers or what

if he has only one employment then he should be on 647L

System

...
He has just been sent notification that his tax code has gone down to 101L
...

Was it HMRC that sent this notification ? If yes, was it a "P2 Coding Notice" ?

A P2 Coding Notice should show exactly how the 101L Tax Code has been derived.

If it was not a P2, then contact HMRC and ask them to explain why the code is 101L + ask for a copy of the P2 Coding Notice.

With a tax code of 101L he will start paying tax for anything earned over the allowance of £1015

With such a low personal allowance, is it possible that this has been set to repay any underpayed tax from previous tax years ?

wilkies5

My son contacted the tax office with a breakdown of his earnings and, just like that, they put tax code back 'up' to 426L.

Had he been away or unable to contact them he would have been really negatively affected by the drop in his personal allowance.

They said it was ' just what their computer does sometimes ', and he was wise to call them!

Thanks for your support. one & all.:T

molerat

Why only 426L as the basic allowance is 647L ?

Horseunderwater

How many casual jobs does he have? How many employers in total that are on going on a same time basis. If more than one, HMRC may have split his allowances to cover all jobs, no matter how casual they are.
Everyone in the UK has the basic tax allowance of £6475 (647L) and if you have more than one job at same time, then his coding should either be full 647L main job amd BR at any others or his allowances should be split proportionately between all of them. The 2nd scenario seems to be a possibility in your sons case.
Hope you and he gets it sorted out.

Horseunderwater

If you son has several current casual jobs from different employers that are all current - not actually left any of them - then his personal allowances should be split between them all, which may well be what is happening here. Perhaps you should ask him.

Mikeyorks

Horseunderwater wrote: »

... then his personal allowances should be split between them all, .

.......... if requested. It's not automatic.

molerat

Mikeyorks wrote: »

.......... if requested. It's not automatic.

Unless they decide to help you out by splitting it against totally spurious randomly generated income figures which are different to the ones agreed (647L / BR) with your other tax office 3 weeks previously :mad: One tax office working on new accurate figures and one working on a combination of old figures and guesswork. I thought the system was supposed be "joined up" now.

Mikeyorks

molerat wrote: »

Unless they decide to help you out by splitting it against totally spurious randomly generated income figures which are different to the ones agreed .

Which is why they wouldn't normally do it automatically. As 'in year' you're the only one who could gauge the split. 'Joined up' still only leaves them with the previous year figures ........ unless / until they implement the real time system that Ministers have just tentatively approved.