New Tax Code - Lower Personal Allowance?

agrinnall

Samsonite1 wrote: »

This is about my P2 - meticulously filed on my desk as I got it today! It says nothing about previous personal allowance.

My previous P2 Coding Notice (meticulously filed with my tax documents) says that my tax code for 2015/2016 is 1060L. My payslips say 1060L.

My total income last tax year was around £80k. This year it will be a little more, depending on my bonus which I have not received yet, but it will not be much more. I am not sure how they could predictively decide I was going to earn more than £100k in any case?

It's good that you've got those P2s. I would suspect that there was another one issued in between that you don't have that will explain where the 8151 came from, as you do seem to be good with paperwork (often not the case with posters on here) then perhaps it just never turned up.

Samsonite1

agrinnall wrote: »

It's good that you've got those P2s. I would suspect that there was another one issued in between that you don't have that will explain where the 8151 came from, as you do seem to be good with paperwork (often not the case with posters on here) then perhaps it just never turned up.

I have a tendency not to get rid of anything, so pretty much guaranteed to have any paperwork! Also have some fairly well-organised filing cabinets which really helps when you need to grab things for mortgage applications and such-like. Actually all my payslips and P60s (among other things) are online, so very easy to get hold of.

How often do you get P2s? I thought it was once a year.

I've had the same job for two years and I only have salary, bonus, pension + private health care which amounts to about £500 or so per annum - no other income source at all and it has never got up to £100k all in. I have always been straightforward in this regard and one of the reasons I have stuck to PAYE is for the easier admin - I could earn a lot more if I worked for myself, but would lack other benefits. On the other hand, I suppose if you are fully in control of your taxes then you are more likely to know what is going on!

Caz3121

Samsonite1 wrote: »

I've had the same job for two years and I only have salary, bonus, pension + private health care which amounts to about £500 or so per annum - no other income source at all and it has never got up to £100k all in.

does your private health care appear as a taxable benefit on your P11D? (mine has a value of over £700 which reduces my tax code)

Samsonite1

Caz3121 wrote: »

does your private health care appear as a taxable benefit on your P11D? (mine has a value of over £700 which reduces my tax code)

Yes, it appears as £512 on the last one.

Savvy_Sue

If:
you had P2s issued during the 2014-15 year reducing your tax code from 1060
but:
your employer has continued to operate with a tax code of 1060L
then:
you have underpaid tax. And will continue to do so.

Do check how your employer receives notification of changes to tax codes, and that they are in fact receiving and acting on them. They may be going direct to whoever runs the payroll.

Darksparkle

Samsonite1 wrote: »

Yes, it appears as £512 on the last one.

I did ask about this in my first post.

You keep mentioning £100K but as we have explained, there are plenty of other reasons your tax code can be reduced from the standard. You have now confirmed 2 reasons -
A taxable benefit from medical insurance
An underpayment

Do you have any other entries on your P11D?

I asked earlier about child benefit, do you or your partner receive it?

agrinnall

Samsonite1 wrote: »

How often do you get P2s? I thought it was once a year.

Most people don't get one at all as there is no change to their tax code other than the standard one for that year (if there is one). Of the rest, many will get just one, as they'll only have a single change of circumstances, but some will have 2 or more depending on what's happened to them (and more importantly, what HMRC are notified of) during the year.

dori2o

Darksparkle wrote: »

I did ask about this in my first post.

You keep mentioning £100K but as we have explained, there are plenty of other reasons your tax code can be reduced from the standard. You have now confirmed 2 reasons -
A taxable benefit from medical insurance
An underpayment

Do you have any other entries on your P11D?

I asked earlier about child benefit, do you or your partner receive it?

From reading the OP various posts I understood that this is a case where the personal allowance is showing as being reduced, not just a case where he is on a reduced tax code.

The OP has stated that their personal allowance is showing on the P2 as 8151, and not 10600, with a deduction from this 8151 of 365 for an underpayment restriction to collect £146, leaving them with a balance of allowances of 7786 and therefore a tax code of 778L.

Therefore something in the income calculation used to calculate the code is adding up to >£100k.

Darksparkle

dori2o wrote: »

From reading the OP various posts I understood that this is a case where the personal allowance is showing as being reduced, not just a case where he is on a reduced tax code.

The OP has stated that their personal allowance is showing on the P2 as 8151, and not 10600, with a deduction from this 8151 of 365 for an underpayment restriction to collect £146, leaving them with a balance of allowances of 7786 and therefore a tax code of 778L.

Therefore something in the income calculation used to calculate the code is adding up to >£100k.

Which is why it would be helpful to know the full situation rather than trying to guess.

OP has said PY salary is £80,000. Plus we now know they have medical benefit taking the income to £80,512.

Plus OP said it is expected to be more this year.

We've also asked if any other untaxed income or any interest.

These things could all add up to take OP over £100,000 or HMRC think there is a chance he will be.