Tax code question

benson1980

Hi are there any tax experts that can help with this one? I'm a PAYE employee and I've never really paid much attention to my tax code. However just looking at my payslip and seeing how much goes out in tax and NI (about a grand) I noticed my tax code has changed in the new financial year to 710L.

From searching, the number relates to personal allowance which is tax free, the default for which is 1060L?

So why is mine a lot less? I don't owe any tax; I don't get any work related benefits as such. I'm on just under 40k a year basic at the moment, and pay hefty (13%) pension contributions per month.

I've gone onto the income tax calculator on this website and it says that my personal allowance should be 10600. It then gives a list of other benefits that may reduce this, none of which apply to me by the looks of things....

zygurat789

benson1980 wrote: »

Hi are there any tax experts that can help with this one? I'm a PAYE employee and I've never really paid much attention to my tax code. However just looking at my payslip and seeing how much goes out in tax and NI (about a grand) I noticed my tax code has changed in the new financial year to 710L.

From searching, the number relates to personal allowance which is tax free, the default for which is 1060L?

So why is mine a lot less? I don't owe any tax; I don't get any work related benefits as such. I'm on just under 40k a year basic at the moment, and pay hefty (13%) pension contributions per month.

I've gone onto the income tax calculator on this website and it says that my personal allowance should be 10600. It then gives a list of other benefits that may reduce this, none of which apply to me by the looks of things....

If you got a bill for £1,000 would tyou just pay it and not check it?
PAYE is all about the code number, all you have to do, and it doesn't take an expert, is make sure it is correct; on an annual basis, because you can only go back 4 years if you have overpaid.
Your code number says you have had £3,500 worth of income, not from benefits as you have already checked but from other untaxed income, rents, gross interest or maybe another , part job possibly some time ago.
You should have been sent a form P2 from HMRC, never ignore communications from HMRC doing so may damage your wealth, this form explains exactly how your code number has been arrived at and will explain everything. Failing finding that ring HMRC, they will be able to tell you and you can have it rectified if it is wrong.

xylophone

https://online.hmrc.gov.uk/shortforms/form/P2

You could try the above.

Have you checked your tax code on P60s for previous years?

Are you owed a refund?

benson1980

Thanks, submitted the above form. My tax code for the previous year was eight hundred and something (I have it on my payslip), and then from April this year (coinciding also with a 5k payrise) it's 710. I definitely don't have any other untaxed income and have never worked a second job. I presume it can't be anything to do with benefits I get from employer pension contributions?

Don't shoot me down again, but I can't find any of my P60s for the last four years. I'm just going from my monthly payslips. I have certainly never had a P2 explaining what the tax code means, hence why I've never picked up on it until I googled it today.

patanne

Are you sure HMRC has your correct address, your employer does NOT update this for you? You should be getting a P2 with that sort of extra deduction for this year.

zygurat789

benson1980 wrote: »

Thanks, submitted the above form. My tax code for the previous year was eight hundred and something (I have it on my payslip), and then from April this year (coinciding also with a 5k payrise) it's 710. I definitely don't have any other untaxed income and have never worked a second job. I presume it can't be anything to do with benefits I get from employer pension contributions?

Don't shoot me down again, but I can't find any of my P60s for the last four years. I'm just going from my monthly payslips. I have certainly never had a P2 explaining what the tax code means, hence why I've never picked up on it until I googled it today.

Then ring HMRC preferable very early in the morning, not Sunday, your tax code last year should have been 1000L. Unless there is some good reason for this, and HMRC have been known to make a mistake, then you are due a refund.
Keep your eye on here in case someone else has a bright idea which rings a bell with you and please come back and tell us what happens.

xylophone

just going from my monthly payslips.

you have these for the last four years?

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/418665/Table-a1.pdf

http://www.taxguideforstudents.org.uk/tax-refunds/how-do-i-claim-back-my-overpaid-tax/how-do-i-claim-back-tax-i-have-overpaid-through-paye-on-wages#previous

TadleyBaggie

Have you got a P11D from your employer?

benson1980

No I've never had a P11D from my employer. The only thing I do get actually is a housing allowance which is £1000 a year. This may account for my code last year which was just under 900. What I don't get is the jump down this year. The reason I looked is because I seem to be ending up with less money a month compared to a year or so ago when I was on more or less the same. That table showing how personal allowance has changed over the years is really helpful as I do have some of my older P60s and the figures tally up. It just seems to be this tax year where I'm being hammered for some reason.

booksurr

you were asked earlier if you got any benefits, depending on how it is paid a "£1,000 housing allowance" could easily be a benefit.

If you cannot find your P2 coding notice then only HMRC can tell you how your code has been calculated, until then we are just pointlessly speculating.

do remember HMRC make mistakes too, so either h#phone then as advised above or write (the latter will take several months to get a reply from though!)

http://www.hmrc.gov.uk/manuals/pommanual/paye11030.htm

this is an OLD format but will give you an idea of the document you are looking for
http://webarchive.nationalarchives.gov.uk/20140109143644/http://www.hmrc.gov.uk/p2/p2.pdf