MTH1 within tax code??

xdm941

Hi all,

Firstly I'm hoping this is in the right forum. I just noticed that my take home salary was quite a bit lower than normal so I had a look at my online payslip. My tax code has changed to 717L MTH1.

Can anyone shed any light on what the MTH1 is?? Last month's tax was £269.47 and this month it's £431.20.

I've not changed jobs (same job 6 years) basically nothing has changed.

Can anyone shed some light??

Many thanks!!!

Chris

scheming_gypsy

presuming it means 'month 1' and it's being calculated like http://www.payroll-help.com/faq/x-after-my-tax-code-mean/

loubeedoo

HMRC usually issue new P6 in september after they've processed P11'ds.

Are you in receipt of a taxable benefit? Health care, subscriptions etc?

HTH

xdm941

Hi there

Actually yes. I just remembered I received a PAYE coding notice a couple of weeks back. it states

Personal Allowance - £7475

minus medical insurance - £299

= tax free amount of £7176.

Have they just taken one lump sum this month? I just spoke to my brother who has his own company and he thinks it has just been a lump sum and next month it will return to normal (less a bit because of the tax code change)

I'm hoping i'm not paying another £200 tax every month!!!

loubeedoo

xdm941 wrote: »

= tax free amount of £7176

This is how they calculated your code, basically £7176 becomes 717L, Month 1 means it isn't cumulative, so yes they have taken a lot of tax in 1 go.

Unles a new code is issued, you will be taxed 'more' than usual, as Month 1, means its not cumulative.

Your employer may receive a new code next month, but you should get in touch with HMRC yourself just to check.

xdm941

loubeedoo wrote: »

This is how they calculated your code, basically £7176 becomes 717L, Month 1 means it isn't cumulative, so yes they have taken a lot of tax in 1 go.

Unles a new code is issued, you will be taxed 'more' than usual, as Month 1, means its not cumulative.

Your employer may receive a new code next month, but you should get in touch with HMRC yourself just to check.

Excellent!! Many thanks indeed for the explanation!!

Kind regards

chrisbur

A change in your tax code from 747L to 717L would result in a tax increase for the year of £60 assuming you are paying at 20%. If the code was applied on a month 1 basis then the tax increase would be £5 and even applied back to the start of the tax year it would be £30. So assuming that this increase "Last month's tax was £269.47 and this month it's £431.20" was on the same gross then something more than this code adjustment is happening.

To check what is happening you need to give taxable gross, tax paid, tax code and basis for each month since the tax year started.

chrisbur

loubeedoo wrote: »

This is how they calculated your code, basically £7176 becomes 717L, Month 1 means it isn't cumulative, so yes they have taken a lot of tax in 1 go.

Unles a new code is issued, you will be taxed 'more' than usual, as Month 1, means its not cumulative.

Your employer may receive a new code next month, but you should get in touch with HMRC yourself just to check.

The tax office use a month 1 code when they put a code down to avoid a large tax deduction on the first wage it is applied to, it will not cause a larger than normal deduction under normal circumstances. The only time a month 1 code might cause an overdeduction is when there is a payment made that is a lot larger than normal for one month, for example an annual bonus.

In the case of the OP on the information so far given there must be something else other than this code that is causing this deduction. It may be that there is more variation in wages than the OP has sugested or something unusual has happened in some previous month, or who knows what? We need more details to tell what is going on.