Changing jobs and losing company car

Shoey1227

Hi all,

I was wondering if someone could help.

Up until 8th January I had a company car through my previous employer. I then left the company and bought the company vehicle as a private vehicle.

Obviously whilst with my previous employer I had a tax code reflecting the fact I had a company car. I was paid last week with my new employer under the tax code 1060L, the personal allowance with no benefits, which I assumed was correct. The new job offers no company car and no benefits like that (such as car allowance) so I thought this was the correct code to be on.

I received a letter today from HMRC putting me back to my previous tax code which wouldn't be correct, as I no longer have any car benefit. I called them and they have increased my tax code slightly but not up to the 1060 I was expecting. I'm confused, am I missing something here? I thought that as I no longer had any car benefits that I should no longer be paying tax for the company car, which is now my own personal vehicle. but I'm being told I will still have to pay it for the rest of the year which is why my tax code is somewhere between my old tax code with my previous employer and the 1060 I thought it should be.

Any ideas? Any help is greatly appreciated.

Many thanks

Shoey

booksurr

your old tax code would have been designed to collect the benefit in kind value over a 12 month period

when you left the old job it is possible that at that exact date you had underpaid on what you would owe cumulatively to that date, hence you have a net underpayment that is being carried over to your new code

what does the coding notice say as to the basis of the calculation?

Darksparkle

Say for example your car benefit for 12 months was £6000, your tax code would be 460L.

You stop receiving the car benefit at the end of Dec. So the pro rata the benefit for 9 months, so £4500 (roughly). So your tax code would be increased to 610L.