Tax Code and new Tax allowance

rafraf03

Hi all money savers !

I am trying to navigate through this dangerous maze that tax is and need your assistance!

Back in January I received a nice letter from HRMC saying that I had overpaid tax by £10 and that I should receive a cheque in the post. :j Yeepee !

Two days later, another letter from HRMC saying this time that I hadn't paid enough tax this year (2010-2011) and that as a result my tax code was changed from 532L to 528L! :mad:
A bit confusing to say the least, but this is not my question (stranger things than that have happened!)

My question is that now that we are in a new tax year and that the allowance has been increased shouldn't I expect yet another letter saying that my tax code should be something like 628L (the allowance has increased by about £1000) ?
Should I ring my tax office to find out?

Thanks for you help !

__________________
rafraf03

kmjnhb

How could HMRC know you hadn't paid enough tax for 2010/11 in January 2011, when the tax year didn't end until 5 April 2011. Are you sure you have the correct dates?

rafraf03

Hi kmjnhb,

I could have got the dates wrong (I don't have the letter in front of my eyes) so it could well be an adjustment for 2009-2010.

Regardless, shouldn't the tax code be adjusted in regards to the recent increase in allowance. If not, this would mean a drop of £40 per month in income!


Thanks for you help !

__________________
rafraf03

kmjnhb

I suspect that the tax code does relate to 2009/10.

It appears as though you have other items included in your tax code (as it was not the standard 647L) before the change. HMRC would therefore usually send a new notice to say what this would be. However, HMRC's record of getting tax codes right has not been great recently.

HMRC do not issue everyone with a new tax coding notice just because the personal allowance has increased by £1,000. The payroll department should increase your tax code by 100 automatically before doing the first payroll run of the new tax year, unless HMRC have told them to use a different code.

You could always call the tax office and have them adjust the tax code to what it should be, if you do not believe it is correct.