Why a BR Tax Code?

Traceyg

Hope someone can help as I am not up on tax codes and just see the tax deducted at the end of the month!!

My other half has received a tax code notification through the post to say his tax code for 2013/2014 will be BR. His job is as and when and he has been working 37.5 hours per week since he started in November 2012. His tax code currently is 816L and on his previous employment which ended beginning of November 2012 was 816L too. When he started the new job he handed his P45 in.

He has no pension and the job he is currently doing is his only job. I assume on a BR tax code you pay more tax? He is going to contact the tax office after Easter to speak to someone about this but is there anyone who can shed any light on this code?

Thanks
Tracey

System

It sounds as though HMRC think he has 2 jobs. HMRC will be able to sort it when he calls them.

Valli

Here is a link but, from what you have said, I'm guessing the P45 hasn't been sent in, from his previous employer.

beartsarah

Hi Tracey,

I'm an accountant and might be able to offer some advice. Couple of questions, was he in another employment before starting this job in Nov 2012? If so did he receive a P45 from it?

Also does he earn above £150K per annum?

BR tax codes means 20% is deducted on everything, usually because there is another source of income where the personal allowance is already being used up or you earn enough to not be entitled to it. Alternatively it may just be a !!!! up because a previous employer didn't file a P45 and it nows looks as if he has two jobs for the next tax year to HMRC.

Let me know and I'll tell you what you can do about it or what he should say to the revenue when he speaks to them.

Sarah B

beartsarah

Just a note to others, if a P45 hasn't been sent in just telling HMRC won't cover it, he will need to contact his former employer or it could take months to sort out.

The employers annual returns aren't due for a couple of months yet and this is where it would be established his employment had ceased without a P45. Otherwise they have no proof other than him saying I've only got one job and they have contradictory evidence to that - they just know the NI number has flashed up attached to 2 different PAYE refs during the year - albeit one a carry over from a previous year and the second when he was registered as an employee in Nov 12.

Cheers to all and hope this helps.

Sarah B

Traceyg

Hi Sarah B

His previous employment was terminated on 3rd November and he received his P45 and handed it in to his new employer on 30th November (we know it was received by payroll as they sent the part 1a back, the one he should have kept.) He's roughly been paying £178 tax on earnings of £1,500 per month and his NI has been £112.

I wish he earned above £150K per annum!! If he was a fully contracted staff member he would earn £14,118 before any overtime. This is his only job.

Just looking at the part 1a of his P45 it says he earned £8,296 and paid £528 tax, they also have his termination date down as 17/11/12 although he finished on 03/11/12.

Just looked at another thread and think I know why there is an issue. When his job was terminated went onto claim JSA for a few weeks until he got the job he is doing, when he started his new job he handed the P45 for the job he terminated. Now just looking through documents he has a P45 from the job centre dated 05/12/12 with £223.15 taxable benefit and no tax paid, tax code 810L.

I think in effect he should have handed this P45 in to his employment? Oh I'm confused!!! Trip to tax office next week then for him.

Tracey

Traceyg

Valli wrote: »

Here is a link but, from what you have said, I'm guessing the P45 hasn't been sent in, from his previous employer.

Thanks for that, will have a look.

beartsarah

Ok well that covers most of the basic reasons why he would have a BR rate!

It is possible that he previous employer provided a P45 but didn't actually submit it? Although this should have been overwritten when the form was filed by the new employer it doesn't necessarily mean it would have overwritten the previous employer not submitting it.

Does the note he has received state which employer this tax code has been sent to? New or old?

Eliminating the higher earnings reason (he doesn't even qualify for paying tax at the higher rate of 40%) means they can only have applied this if they think he has two jobs or another income source. I take it no pensions means he is not at the age where he would and is not receiving a state pension? If he is entitled but has chosen to defer that may be the problem because the deferment hasn't been recognised.

Based on that being a yes - no state pensions, my advice would be when he phones them ask the following questions;

1. Why has the tax code been changed and why is he no longer entitled to his personal allowance?
2. What employments does his record show?
3. If it shows more than one employer ask who they are. If the old one is still on there explain that he has a P45 from that employment and that was provided to his new employer and a copy of his part can be provided to HMRC if necessary (this may just shortcut any checks and they will actually look at what the new employer and old employer have submitted).

However if they come back with anything else at all, they think he has other income streams, anything to do with higher earnings limits or expenses and benefits etc then get as much information as you can as to why it has been applied and if it isn't changed or resolved on the call let me know what the problem is and I'll help anyway I can - just post or pm me.

Dealing with HMRC can be awkward depending on who you get in which department - sometimes their great, sometimes they don't have a clue and as I speak to them daily and have got used to the common problems I'm always happy to help anyone struggling!

Let me know how you get on or if you have any other questions before he makes the call.

Good luck, Sarah B

Traceyg

Sarah B

Hi code notice says his new employer. No about the pension, he is only 34.

Thanks for all your advice and I will take you up on the offer of a pm if he has any problems after speaking with them. In all the 14 years together and changes of employment he has never had any issues until now, oh well hopefully he will get it sorted.

Tracey

beartsarah

No worries Tracey it's amazing how often these things crop up and to be honest it's usually an employer hasn't ticked the right box somewhere, hope it gets sorted quickly and I'm here if it doesn't!

Sarah B

Traceyg

Just a quick update, him indoors has been to tax office and spoke with someone over the phone. They have him down as 2 jobs, his previous employer (the shop with the big green sign) has failed to file his P45 with the tax office (no surprise with this company!)

Anyway it's all been sorted and they have issued him with the correct tax and they have carried his uniform laundry allowance over as he has to launder his uniform. They said that they would send him a new notice out in the post.

Thanks all for the advice

Tracey