Tax code 503L W1

gelato_cat

Hi there

I was made redundant at the end of March and started a new job in the middle of May.

My old employers were being difficult and didn't send me my P45 until long after I had started the new job (and even then they put the wrong salary on it) so I had to fill in a P46.

As a result, I've been taxed under the code 503L W1 since I started this job.

Does anyone know what the W1 means? Is it likely that I am paying too much tax? If so, how would I remedy this?

TIA

Suze

joshm_2

W1 means tax is calculated on a non-cumulative or 'Week 1' basis. In other words I think the tax is calculated without taking into account any previous earnings because that information is not available. It'll get sorted automatically is my guess, maybe through a rebate at the end of the tax year.

Tallymanjohn

If the figure on your P45 is incorrect then you need to query it with them and/or the tax office as they will have sent a copy to the tax office and your new tax code will be based on this - you could end up losing out if there is a big discrepancy.

gelato_cat

Thanks - I will. Starting a new job on Monday so will talk to the tax office soon

Suze

joshm wrote:

W1 means tax is calculated on a non-cumulative or 'Week 1' basis. In other words I think the tax is calculated without taking into account any previous earnings because that information is not available. It'll get sorted automatically is my guess, maybe through a rebate at the end of the tax year.

gelato_cat

Thanks - yes, the salary on the P45 was higher than what I was paid. I kept it because I thought it might come in useful if I needed to prove that I earned more than I did (eg to some cr*ppy recruitment agency who won't put you forward for jobs you can do cos you're not earning enough in your current one).

I queried it with my old co and they sent me a corrected one. I didn't think to check that they'd sent a copy of the new one to the tax office though - I guess I should!

Suze

Tallymanjohn wrote:

If the figure on your P45 is incorrect then you need to query it with them and/or the tax office as they will have sent a copy to the tax office and your new tax code will be based on this - you could end up losing out if there is a big discrepancy.

Mikeyorks

The 503L Wk 1 was correct as you would have ticked section B of the P46 (sole job - but prior job since 6 April).

But as you have received the, now corrected, P45 - your new employer should have switched to using the data (including Code) from that? Haven't you passed it on??

Your Code (previous post) is generally unrelated to what you have earned.

gelato_cat

Mikeyorks wrote:

The 503L Wk 1 was correct as you would have ticked section B of the P46 (sole job - but prior job since 6 April)..

Yup...

Mikeyorks wrote:

But as you have received the, now corrected, P45 - your new employer should have switched to using the data (including Code) from that? Haven't you passed it on??.

No I didn't realise I had to once I'd filled in the P46! How blonde am I?!

Mikeyorks wrote:

Your Code (previous post) is generally unrelated to what you have earned.

Thanks for the information. I rang the tax office earlier and she said the best thing to do would be to send them my old P45 with a note (as I am finishing my current job this Friday, so no point giving it to my new employer now) and then when I start the new job, make sure I hand in the P45 from my current employers. Then hopefully in a couple of months everything will be sorted out.

Suze

Mikeyorks

Suzey

As you're moving jobs .. your options are limited. Yes, you have to pass on the P45 from your most recent employer. But that, of course, passes on the problem of the Wk 1 code.

But if you send on the old (but corrected one !!) P45 from your previous employer - that will expedite HMRC issuing the correct code to your next employer.

Net result - as I read it. If you were paying tax in the year to 5th Apr 2006 - you may have a small refund due for the period you weren't working from 'end of March' to 5th April. If your P45 from the first employer you mention shows earlier than 'Week 52' - that's likely the case. But you need to reclaim that from HMRC (include it in the letter you mention) - as that tax year is now ended.

For this tax year - you were entitled to some portion of your personal allowance (£5035pa is the norm) in the period you didn't work up to 'mid May'. You haven't had that allowance because of the Week 1 element of your code since. But it will automatically be resolved once you get a cumulative code from HMRC - and you will get a refund / or pay less tax in the first week of operation of the new code.

The amount you have been paying under 503 W1 is probably right - it's just the unused portion of your allowance that needs to be brought into play. And the fact you're leaving your last job but immediately starting a new job, won't make that situation worse.

gelato_cat

Hi Mike

Mikeyorks wrote:

As you're moving jobs .. your options are limited. Yes, you have to pass on the P45 from your most recent employer. But that, of course, passes on the problem of the Wk 1 code.

Yes - just as I thought...

Mikeyorks wrote:

But if you send on the old (but corrected one !!) P45 from your previous employer - that will expedite HMRC issuing the correct code to your next employer.

Yup. I plan to do this asap - it's going to take the tax office six weeks from receiving my letter to do anything!

Mikeyorks wrote:

Net result - as I read it. If you were paying tax in the year to 5th Apr 2006 - you may have a small refund due for the period you weren't working from 'end of March' to 5th April. If your P45 from the first employer you mention shows earlier than 'Week 52' - that's likely the case. But you need to reclaim that from HMRC (include it in the letter you mention) - as that tax year is now ended.

Well, the situation is that my last day with the old place was 31st March. They made me redundant, told me to leave the office and not to come back and paid me my month's notice plus unused holiday plus redundancy pay at the end of April in the pay run.

I started the new job on 16th May.

Like I said, my old company were being a-holes and took ages to send the P45. With the new one (which was posted on 4th July!!!) I got a note saying:

Replacement P45 enclosed. Figures relate to the payment received in the April payroll ie in the 2006/7 tax year.

This looks to be approximately my last month's pay, redundancy and holiday pay. Tax code is 529L.

Mikeyorks wrote:

For this tax year - you were entitled to some portion of your personal allowance (£5035pa is the norm) in the period you didn't work up to 'mid May'. You haven't had that allowance because of the Week 1 element of your code since. But it will automatically be resolved once you get a cumulative code from HMRC - and you will get a refund / or pay less tax in the first week of operation of the new code.

Hopefully sooner rather than later!

Mikeyorks wrote:

The amount you have been paying under 503 W1 is probably right - it's just the unused portion of your allowance that needs to be brought into play. And the fact you're leaving your last job but immediately starting a new job, won't make that situation worse.

With any luck! I can't believe how thick I've been Luckily it looks like it can be sorted out easily.

Suze

gelato_cat

You said (sorry, it won't let me use the Quote function!):
You will have had your full tax allowance for 2005/06 if you were paid monthly

I was paid monthly, yes.

You said:
Being paid at April will use up your tax allowance up to 5th May. Your now being paid weekly, so 5th May is in week 5, 16th May is in week 6, but presumably you didn't get paid until a week later, so that's week 7 meaning you have only 1 weeks worth of allowance (week 6) you have not used.

Yes. However, my personal allowance is lower under the incorrect tax code, so I should get some money back because of that innit?

On my P45 it says that my leaving date was 31st March even though they made a payment to me at the end of April - don't know if that changes anything.

Suze

Mikeyorks

Suzey wrote:

They made me redundant, told me to leave the office and not to come back .........

Suzey,


Fortunately never been there ..... but not at all nice.

OK. If they paid you some money in this tax year - that rather closes the gap on the unused allowances. That's the bad news.

But the good news (hopefully) is that Code 529L is above the norm. You somehow appear to have around £260 more personal allowances than most of us (pension / contribution to professional body etc ??). If the entitlement to that extra didn't lapse with the job you left in March - then you will have been overpaying tax since May. Only at the relative margins - but you should be due to a smallish refund / reduction when HMRC replace your current code with a cumulative one. Particularly if that is 529 rather than the more normal 503.

Bit of a daft aside !! Throughout this I've mentioned 'weekly' pay - but it's always struck me you don't sound like a 'weekly' girl. If that makes any sort of perceptive sense? And you mentioning 'monthly' pay in this last post seems to confirm that. The sole reason is you quoted 503 W1 in your original post. The monthly equivalent would normally read 503 M1 - or simply 503 1. So it's not a fixation I have with having 52 rather than 12 in a year - there was a reason behind it;)