New tax code

zudecke

Hi,

I received a letter saying that my tax code has now changed from 647L to 634L.

Can anyone let me know what exactly this means for me?

Thanks,

Z

CCFC_80

Just simply means your personal allowance before you start paying tax has been reduced from £6475 to £6345 this year.

Did you not get a letter of explanation or maybe not pay enough tax last tax year.That should explain it,

corgi74

I have had one too. Mine has gone from 635L to 606L. Can't understand why mine was 635L in the first place. I have healthcare through work which may affect it but it's very annoying.

professionalaccountant

Yep - it will be your healthcare through work that reduces your pesonal allowances. A benefit in kind, such as healthcare, is considered salary and subject to tax. Since you do not physically pay cash to settle the tax it is collected by reducing your tax free allowance.

zudecke

LOL, they tax my "benefits"??

Insane..

CarolynH

zudecke wrote: »

LOL, they tax my "benefits"??

Insane..

Not insane. It would cost you money from your post tax salary to buy the same amount of benefit, therefore it is taxed.

You're still getting a good deal as you're only paying 20% or 40% (depends if you are a higher rate taxpayer) of the value of the benefit - if you had to buy it yourself you'd pay 100%