Tax code not updated for 2011 year

iharding

The only taxable benefit I receive from my current job is health insurance. I received a tax code notice around the end of last year giving the calculation of personal allowance (6475) - insurance premiums (1000) = tax code (547L). All makes sense based on last years personal allowance, but this increased to £7475 in April, and the coding notice was specifically for the 2011-12 tax year. From what I've read this should give me a tax code of 647L, which as I'm a higher rate tax payer means I'll be paying £400 too much tax over the year.

Before I contact the Inland Revenue, please can someone confirm my understanding of the rules?

Many thanks,
Ian

FatAndy

The tax code notification you received was probably sent out before the allowances for 2011/12 had been announced.

What normally happens at the start of a new tax year is that HMRC inform employers of the uplift for each type of code so unless the employer has received a new coding notification they'll just add 100 onto each "L" code. If they're using payroll software there'll be some function in the software to do this for every employee rather than have someone individually go through each employee and amend their codes one by one.

If your code has been uplifted it might be worth checking with your payroll people to see if there's a reason for this.

iharding

My employer was acquired by a bigger company at the beginning of the year. Payroll was switched over at the start of April, so it's quite possible that the code uplift wasn't communicated to central payroll during the transfer. We've already had to sort out a mess with the annual leave allowances :-(

I've emailed HR. Will be interesting to see what they say.

Thanks,
Ian

System

iharding wrote: »

My employer was acquired by a bigger company at the beginning of the year. Payroll was switched over at the start of April, so it's quite possible that the code uplift wasn't communicated to central payroll during the transfer. We've already had to sort out a mess with the annual leave allowances :-(

I've emailed HR. Will be interesting to see what they say.

Thanks,
Ian

You need to contact HMRC too and see if they are aware that your employer has changed. Make sure you confirm the new company's PAYE reference number before you contact HMRC.

iharding

Payroll/HR say they never received a new code or uplift instruction, but when I called HMRC they already had a different code in their system, which would have been correct but they had last years figure for medical benefits so it was too high. Anyway, they have the correct benefit value as per my P11D now and the new code calculation agrees with mine. They are reissuing the correct code to my employer (which is still as far as HMRC are concerned the same company I've worked for for 11 years, even though the pay is now administered through the central corporate system). Should be worth another £25/month take home, plus a refund for the last three months :-)

Thanks,
Ian