BR tax code - incorrect?

captain_crunch

Hi all

I started work at a new firm in July. I am also registered as a sole trader. Since then I've had a letter from the revenue saying my tax code for this year is "BR".

Is this right? I'm under the impression that "BR" is ALL your income taxed at 22% with no allowances. The salary is £42000; would I be better off with a different tax code? Will another tax code mean I start paying a higher tax rate?

All my income from my second job (my sole trader small business) is already taxed at the higher rate.

I sent my P45 to the new firm within a week of joining - could this have got lost and that is why I'm on BR?

Also, and here's the cruncher - can I claim any overpaid tax back now, or does it have to wait until I fill in my next SA?

Sorry for all the questions!

Regards

Keith

Hoddie_2

The BR code will not collect enough tax from a £42k salary. However, as you've not yet had this salary for a full 12 months it may be you have overpaid.

If the BR code remains in use, you will need to pay more tax on your employment income when you come to do your tax return. This is because you will have too much income taxed at 22% and not enough at 40%.

If you have pay/tax figures to date (usually on the latest payslip), I'd advise calling HMRC to check whether it would be worth your while for them to issue the 503L code. If you have overpaid tax to date, this would allow your employer to refund it, but more importantly it will collect the right amount of tax in future as well (as I said, if BR is used for a full tax year, you'll not pay enough at source and will have to pay more through SA).

peekaboo28

Not sure what you mean by all your sole trader income is taxed at the higher rate, is this not paid through self-assessment?