Tax code D0 issue

JUJU

Hi I've just received 2 letters from HMRC stating that my tax code for 13/14 will be D0 which will allow them to take 40% on all earnings from pension and wage.

I recently changed jobs internally due to ill health and receive £12,000 in pension and £35,000 in earnings. After deducting my personal allowance my calculations show that approximately £37,000 should be taxed.

Am i calculating this correctly and if so do does this seem like a mistake on there behalf? 40% would see me around £600-700 a month worse off.

I will be calling the tax office tomorrow but would like to see if i'm on the right track.


Any help would be much appreciated.

Thanks Ju

GlynD

I've had similar with them over the past couple of days. I phoned them and they sorted it out. One piece of advice I would give you is have as much dosumentation to hand as possible to provide correct information to them.

agrinnall

Has your internal transfer resulted in your pay being processed by a different part of the company? It sounds to me like HMRC think this income is in addition to income from your old job (assuming that by itself put you into 40% tax) but I wouldn't have expected that could happen if both the old and new pay were processed the same way.

System

It sounds to me as though HMRC think you have 2 jobs and 1 pension with the new internal job causing the confusion. Call HMRC and tell them it was an internal transfer and you still only have one job. There's plenty of time to get the code corrected before April.

For 2013/2014 assuming you are under 65 the first £9440 of your income is tax free.
The next £32010 is taxable at 20% and anything above that is taxable at 40%.

heretolearn_2

It sounds as though you are applying the 40% to the whole amount. You don't, just the part that is over the threshold for paying 40%.