W1/M1 Tax Code Error

littlemissbossy

My husband started a new job last month, when he got his first payslip I noticed that his tax code said 405L1.

I asked him to query this with his wages dept as to me it looked like he had been put on a W1/M1 basis, his P45 had said just 405L.

His wages dept have said that they have made a mistake and will correct it but my question is will he have overpaid or underpaid on his tax?

Thanks for any help.

[Deleted User]

Depends... What was the date of leaving on the P45? Any other income since 5th April 2011??

littlemissbossy

Deleted_User wrote: »

Depends... What was the date of leaving on the P45? Any other income since 5th April 2011??

Thanks for your quick reply

Date of leaving from P45 13.05.11

Only income from 06.04.11 - 13.05.11 was his salary from the job he's just left.

HTH

molerat

Possibly underpaid as he has probably been given some tax free allowance twice but it all depends on pay dates, if weekly or monthly paid and when he left / started etc.

lijaloo

If he has paid tax on a week1 basis rather than standard he will have probably overpaid his tax. W1/M1 tax codes mean that tax is not deducted on a cumulative basis.

chrisbur

Only way to tell is to check the month numbers on the P45 and the payslip. If P45 has month month 2 and payslip month 3 then tax will be correct to within a few pence. If P45 and payslip have the same month number then he will have been undertaxed, and if there is a gap between them he will have been overtaxed. Either way it will be corrected when the code is applied on a cumulative basis. If there was some change in the pay interval eg weekly to monthly it is more complicated and would need full details of P45 and pay.

Just a thought the code of 405L is lower than the basic code, does the reduction still apply? If for example it was for some benefit in his old job that he no longer gets then needs to tell tax office to get his code corrected.

littlemissbossy

chrisbur wrote: »

Only way to tell is to check the month numbers on the P45 and the payslip. If P45 has month month 2 and payslip month 3 then tax will be correct to within a few pence. If P45 and payslip have the same month number then he will have been undertaxed, and if there is a gap between them he will have been overtaxed. Either way it will be corrected when the code is applied on a cumulative basis. If there was some change in the pay interval eg weekly to monthly it is more complicated and would need full details of P45 and pay.

Just a thought the code of 405L is lower than the basic code, does the reduction still apply? If for example it was for some benefit in his old job that he no longer gets then needs to tell tax office to get his code corrected.

Thanks for all the replies.

The P45 is dated 13.05.11 and his first wage is 23.05.11, so hes in effect been paid half a month and some holiday pay from his old job in May and the other half a month in his new job. (Did that make sense?)

His tax code comes from having a company car, he has advised the tax office of the change in vehicle but thanks for mentioning it.

[Deleted User]

Sounds like an underpayment may have occured then if he recieved 2 payments in Month 2.

chrisbur

littlemissbossy wrote: »

Thanks for all the replies.

The P45 is dated 13.05.11 and his first wage is 23.05.11, so hes in effect been paid half a month and some holiday pay from his old job in May and the other half a month in his new job. (Did that make sense?)

His tax code comes from having a company car, he has advised the tax office of the change in vehicle but thanks for mentioning it.

Proberbly an underpayment but as I said before check the month numbers on the P45 and payslip to be sure.

[Deleted User]

Also worth mentioning, this often happens when an employee gets 2 payments in 1 period and the fact wk1/mth1 was used wouldnt alter that, it just means the extra will be collected next Month rather than out his first pay packet.