Tax Code - How to work out if I have paid correct amount?

Financial_Savvy

Hi all,

The HMRC changed my tax code to collect some unpaid tax on a week 1 month 1 basis (whatever that is). But after that I did alot of overtime etc so will have earn't more, so would have paid more tax?

I have my P60, how can I work out if I have paid the correct amount of tax?

My final tax code on my P60 in 2006/2007 was 0308L.

In the 2007/2008 year it is 376L.

I have a has the same company car for the last few years. That is the only benefit.

I have assumed a personal 0% tax allowance of £5035 for 06/07, 10% tax allowance of the next £2150, and 22% on everyting else (I'm not near the 40%). But the figure I get is not what is on the P60.....

Can you guys help?

tigtag02

This is because your tax allowance is not £5035 but £3085 for tax year 06/07.

CLAPTON

as already said the 0% allowance is 3080 for 6/7 and will be 3760 for 7/8.
You need to look into why it is low... obviously a company car ..any other benefits ..look at your P11. also there may be back tax being collected.. your notice of coding should show this.

Financial_Savvy

I have 2 coding notices from HMRC. I agree with the personal allowance of £3081. (Company car and to collect tax where they stuffed the tax code)

If I use 3081 as 0%, the next 2015 at 10%, and 22% on the rest I don't get the same figure as the tax on the P60. Is this because I did more work when they put me on a week 1, month 1 basis?

Do you guys want the figures?

On the back of the 06/07 coding notices it says that you pay 10% om the first 2090 (I thought it was 2015 for 06/07?)

Thanks guys

Bean_Counter

10% band was £2,150 for 2006 / 07 and £2,090 for 2005 / 06.

Double check the tax codes are for the same year and use the one with the latest date. Does this agree with the code on your P60?

Financial_Savvy

Got 2 coding notices for 2006/2007.

Jan 06 says 346L

Jan 07 says 308L

On the back both say 10% allowance is £2090

P60 says 308L

The 308L code is car benefit and underpaid tax. (DOn't agree with the underpaid tax though as this was in 04/05!

Shall I call them?

Bean_Counter

Financial_Savvy wrote: »

Shall I call them?

I would if I were you, they are generally pretty helpful on this type of thing.

You can always post back here afterwards, if you want.

CLAPTON

can you give us all the figures on your p60.

Financial_Savvy

Just called them. Sure enough some of the lower code is to collect tax back in 04/05! As I have come out of the Self Assessment system they said I would need to send in my P60 with a covering letter....

P60 figures are:

£26351.60 Gross pay in employment
£24863.37 *Gross less pension contributions etc. Use this for tax return...
£4370.77 Tax
308L Final Tax Code

First coding notice - 346L (£3462)
2nd coding notice - 308L (£3081)

Anymore info just ask! Help much appreciated.

Hoddie_2

To work out the tax due you need to add your gross taxable pay (£24,863.37) to the cash value of any company benefits (ie the car). Do not take the car figure from the latest coding notice, it may be correct but to be sure use the figure from your P11D, or ask your employer if this hasn't been issued yet.

Then go through the rate bands.

5,035 @ 0%
2,150 @ 10%
31,150 @ 22%
rest @ 40%

Then add on any underpayment they were collecting (from the second coding notice).

Financial_Savvy

Can anybody help with the equation?

Thanks