New tax code help

System

Assuming that
a) code is for 2012/13 ( personal allowance £8105) and
b) you are under 65 with no other income besides the rental income and salary and
c) you are a 20% tax payer

then a K code of K160 means HMRC is trying to collect tax due of

£1921 = £8105 + £1600 = £9605 @20%

This means that you do have your personal allowance but it is used up in the recovery of your tax liability calculated from your tax returns and there is none left over for your salary.

As a previous poster said this is an interest free way of repaying the tax you owe over one year.

masscrazy

Thanks for all the responses! I've now been given this years taxcodeK887

What does this mean now? I'll be taxed £8k from my salary, they've already taken £200 from my march amount?

Mikeyorks

The first K code arrived very late in the tax year - therefore very little of the arrears were collected from it. So they are increasing the negative figure in order to collect more in 2012-13.

But as you're reluctant to provide figures - then just look at the Coding Notice as that tells you exactly what the underpayment is they're collecting? Only you know if that matches your SA liability.