CUMUL vs NONCU - tax code whats the difference?

splatt30

I returned to work after 9 months maternity leave in June. Initially my tax code was followed by "CUMUL". Today however it has changed to "NONCU" and with it it is £300 less take home due to it bring taken in PAYE.

I had a letter stating my tax code was changing from 888L to 877L due to some petrol money from last year which escaped tax, but I don't think that should affect me to the tune of £300 a month, and I don't know which should be correct, cumul or noncu, nor what either effctively means.

Can anyone shed any light?

theblessedone

NONCU or "Week 1/Month 1" as they are more commonly known, are Tax Codes that only look at the current months earnings, and do not take the previous Tax Year earnings in to account. A cumulative code, does the opposite, where it will look at your previous earnings, and re-adjust your Tax payments

To put it in to perspective;

If you were on a BR Tax Code (No personal allowance entitled) through the whole of this Tax Year, and then you suddenly received a 747L Cumulative Tax Code change in March 2012, at the very end of the Tax Year, it would look at all your previous earnings from April 2011 (start of Tax year), it would look back and realise that you had been "over-taxed" and give you a rebate.

Now, in your case, the fact it has changed from Cumulative to Non-Cumulative, is quite strange and I would contact the HMRC and get them to explain why they have changed it this way.

chrisbur

The tax code change that you have had would under normal circunstances cause a tax increase of less than £2 a month. Obviously there is something else happening with your wages. Without details or earnings and tax paid I can only guess, but you say you have been on maternity leave to June so would I be right in thinking that you had little or no earnings at from 5 April untill you returned to work in June. If so you would have accumulated tax free allowance which would give you some time not paying tax. The use of a non-cumulative code would end this though it might have been due to end anyway, cannot tell without wage details. If you still have some unused freepay it would be to your advantage to ask the tax office to adjust your code to cumulative.

WaxiesDargle

it explains it here as well

http://www.payroll-help.com/faq/x-after-my-tax-code-mean/

chrisbur

WaxiesDargle wrote: »

it explains it here as well

http://www.payroll-help.com/faq/x-after-my-tax-code-mean/

This is a very good explaination of the affects of these ways of applying tax codes in normal circumstances, but something else is happening to the tax of this poster that is not covered in this. More information is needed to be sure what is happening.

splatt30

Thanks for your replies. It is pretty much as I thought the cumul / noncu thing. Would I be right to assume that for most people working 1 job for 1 employer CUMUL is the normal variant as they know what you've paid previously and can thus, even out your tax over the entire year?

I have no idea why it has been changed. But clearly it means that they have taken this month on it's own, without consideration to the fact that for the first 3 months of the tax year I was on only statutory mat pay.

The change from 888L to 877l is for £100 of diesel so they want £40 over the whole year. It's the noncu thing that seems to be the bother.

I think I will attempt to ring the tax office on Monday, though last time I tried to do that I spent a total of 3 hours on hold over 3 days!!!

chrisbur

splatt30 wrote: »

Thanks for your replies. It is pretty much as I thought the cumul / noncu thing. Would I be right to assume that for most people working 1 job for 1 employer CUMUL is the normal variant as they know what you've paid previously and can thus, even out your tax over the entire year?

I have no idea why it has been changed. But clearly it means that they have taken this month on it's own, without consideration to the fact that for the first 3 months of the tax year I was on only statutory mat pay.

The change from 888L to 877l is for £100 of diesel so they want £40 over the whole year. It's the noncu thing that seems to be the bother.

I think I will attempt to ring the tax office on Monday, though last time I tried to do that I spent a total of 3 hours on hold over 3 days!!!

Cumulative is the basis used for most people however many jobs they have. It does not really even out the tax it calculates whatever tax is due for the year so far at each payday allowing you a fraction of your allowances depending on where you are in the month. So in month 6 (ie half way through the year) you get half you tax free allowance half your 20% tax allowance and so on. The next month you get 7/12 then 8/12 etc. From this is deducted what you have already paid and that leaves what you pay that month.

The non-cumulative code is often used for a reduction in tax code to avoid it being backdated to the start of the year and producing an excessive tax deduction when first applied. In your case with a small change it would not have made a lot of differance. In fact you might have paid a bit less tax or a bit more cannot tell without earnings and tax paid figures.