Tax code change

onlyroz

I think you are all probably right. For now I am going to put the extra money into a savings account and see what happens next month.

dori2o

The deduction to your code will have been updated now that the P11d that your employer has submitted has been processed. If you know the Medical benefit actually costs £1854 but there is only 325 deducted from your code (which I assume is the part year amount on the P11d) then you should contact HMRC on 08453000627 to tell them what the actual benefit value is and they will amend your tax code. This will also keep any underpayment to a minimum when the details are reconciled at the year end.

onlyroz

Isn't it best that the underpayment is in my bank account earning interest until they ask for it?

BoGoF

onlyroz wrote: »

Isn't it best that the underpayment is in my bank account earning interest until they ask for it?

Yes, from a pure moneysaving point of view. Even better news is that once the actual underpayment is established after 5 April 2012 it will be collected through your 2013-14 tax code. Or you can pay it as a lump sum.

dori2o

onlyroz wrote: »

Isn't it best that the underpayment is in my bank account earning interest until they ask for it?

Personal preference really. I'd rather have the code right and hope the underpayment is less than £50 in which case it will be written off.

onlyroz

I have looked through my records, and I see that I have two P11D forms for tax year 2010-2011. One from my previous employer shows £1491 in private medical insurance. One from my current employer shows £322 - and so it seems like HMRC has used the latter figure to determine my tax code.

What will happen now if I do nothing? Will they eventually find the second P11D and then add together the two figures? And what is MEANT to happen if somebody works for two employers within the same financial year?

BoGoF

They will only carry forward the benefit from your current employment to your 2011-12 tax code.

I am not sure what you mean by what is meant to happen in the circumstances. When reviewing 2010-11 they will take both P11d's into account and see if you are under or overpaid.

onlyroz

I guess what I am asking is, based on the two P11D forms they will have received, have they made a mistake in my tax code and if so, what steps will they take to correct it?

BoGoF

No there is no mistake, the amount being coded is the amount shown on your P11d from your current employer. However because the amount being coded is for a part year you will end up being underpaid, as you are aware. Once your employer submits the 2011-12 P11d HMRC will issue a calculation with that information.

onlyroz

How can they know that I have underpaid? So yes, they will see that my health insurance was larger in 2011-12 than in 2010-11 - but what can they infer from this other than that the premium has gone up?