Change in Tax Code after P87

PaulSaver

Hi all,

Now this may be a stupid question but I wanted to check.

I've completed a P87 to claim tax relief on milage done for work as they don't pay the full amount available. All done cheque received this morning, so all happy!

In addition they have changed my tax code to give me an extra £2k in my tax free allowance. Now this makes sense to me if I did the same miles each year, but I can't guarantee I will, maybe I will, maybe I won't.

So should I just leave the new tax code as is, and then sort it out at the end of the year, potentially owing HMRC money? I'm concerned about doing this as I guess they will get the shortfall back through PAYE meaning I am still paying them back until 2013, or can I just send them a cheque?

I'm feeling it's best to ask them to put me back on my normal allowance and I do another P87 next year. Seems odd I know, but the thought of owing HMRC at the end of the year terrifies me!

Also I presume I need to do another P87 next year even if the relief is right, to validate their assumption for this year?

Sorry for what may be pointless questions

Thanks, Paul

jennifernil

When OH was still working he had the same scenario, except he was doing full tax returns.

They did try to get it correct with the code number, but as you say, it may not be 100% correct.
If you are due a refund you can ask for a cheque, as you have obviously done (sometimes they put it into the next years code), and likewise, if you have something to pay, you can opt to send a cheque.

Is there an option for that on the P87?

The full return is not that difficult, so that would be another option, and can be done on-line if you wish.

PaulSaver

As long as I can send a cheque to correct what I owe then alls good! Thanks for that info.

Would HMRC reduce my allowance back to standard if I asked them to, I know it seems a little odd but I just don't like the uncertainty in having to find money at year end if that makes sense?

jennifernil

I expect they would if you asked.

Is it likely to be that far out?

As you need to keep records anyway, how about reviewing things each month and setting aside an amount in a separate account if you find things are getting too far out of step? Then you get the benefit of the interest till you send them the money.