New tax code help

masscrazy

agrinnall wrote: »

No, if your salary is 22K you will now pay 20% on 23.6K but on a standard tax code would have paid 20% on 14.5K.

So do you want to share with us why they have changed your tax code to K160?

Well placed a tax return on few places that didnt send TR for previous 4 years.

jem16

masscrazy wrote: »

Well placed a tax return on few places that didnt send TR for previous 4 years.

That doesn't make a lot of sense.

Care to translate?

masscrazy

jem16 wrote: »

That doesn't make a lot of sense.

Care to translate?

I dont want to say really, this is the internets. But i'm due to pay tax on extra income from properties. It was calculated over the amount that I'll pay from salary tax. So not sure if i'm gona have to pay anything right now.

Mikeyorks

So this is a compulsory Coding out ....... or a voluntary one?

masscrazy

Mikeyorks wrote: »

So this is a compulsory Coding out ....... or a voluntary one?

What does this tax term you're using mean? Voluntarily showed the properties (over 4 years old) this year, the TR showed over few K is owed and it seems they're taking most from salary tax.

agrinnall

Nobody knows who you are on here unless your name really is masscrazy :eek:

Just to get things straight:

• You own several properties that you have been letting out for a few years and you have not submitted tax returns during that time so that the letting income can be assessed, and taxed if necessary.

• You have now submitted a tax return, showing all of the letting income, and you have been assessed as owing more than £2000.

• HMRC have issued a coding notice with a tax code of K160 so that they can recover all of the tax due in the 2012/3 tax year.

If the second point is correct then yes, what HMRC have done is the normal way of recovering tax over £2000. Had it been less than £2000 they would have asked you to pay it yourself (although they will usually allow you to do it in instalments, but probably over less than a full year). I doubt if you will get a better deal from them than this, so you'll probably have to live on a reduced income for the next year. For future years your tax code should be adjusted to take into account the letting income expected for the next year, although if it's a significant sum you may be required to make payments on account.

Mikeyorks

masscrazy wrote: »

What does this tax term you're using mean? Voluntarily showed the properties (over 4 years old) this year, the TR showed over few K is owed and it seems they're taking most from salary tax.

Voluntarily means you're compliant and declared your liabilities via a Return. You can then opt to have debts under £3k recovered via PAYE.

Compulsory means HMRC decided to recover debt you're not paying - in that way :

Legislation contained in the Finance Act 2009 allows HMRC to collect debts up to £3000 by making an adjustment to an individuals PAYE code where the individual has a PAYE source with sufficient income.

jennifernil

masscrazy wrote: »

What does this tax term you're using mean? Voluntarily showed the properties (over 4 years old) this year, the TR showed over few K is owed and it seems they're taking most from salary tax.

If you have not done the tax returns for 4 years when you should have been doing them, I would just pay up as requested (assuming it is correct) and not rock the boat too much. You may find penalties being applied if you don't!

Or maybe they already have been applied?

masscrazy

So this means I will not have a tax free allowance from now on and they will add another 1600 quid to tax and send me a bill for the outstanding balance. Nice.

jem16

masscrazy wrote: »

So this means I will not have a tax free allowance from now on

That depends on the revenue that you are receiving from the property each tax year. If it's the same or more than the personal allowance then yes you would have no tax-free allowance but if it's less then you will have some.

As you don't give figures that's all that can be said.