My Tax Code has changed Mid-year will I get money back off the tax man and when?

PEEWD93

Hi all I have received a letter from HMRC dated 12/12/2016. The letter states that my tax code(s) for 6 April 2016 - 5 April 2017 has been changed. My tax code has changed from 1100L to 1184L.

My initial understanding was that my tax free allowance has now increased from 11,000 to 11,846. This is because I completed a P87 for tax year Apr 15 - Apr 16 as my current employer only pays 31p per mile rather than 45p a mile for business miles. So another colleague suggested that I completed the form (which I did) as I could be entitled to tax relief. Some two weeks later I received a letter and a cheque for this over payment of tax due to these job expenses. Since submitting that for they have carried the same £846 worth of Job Expenses over from Apr 15- Apr 16 P87 and amended my tax code for this year.

I have done a check and I have done a similar mileage to last year at this point so I am not worried that this forecast HMRC have made based on the previous year could leave me short and owing the tax man money. However my main question is if my tax free allowance has increased when will I receive the additional funds as I have over paid tax from 06/04/16 to this date? Is there anything I need to do to claim them? Obviously the tax code amended is from 6 April 2016 and we are now in December, so what happens to all this previously "over paid tax" in a sense?

Thanks for your time.

Linton

AIUI, the way PAYE works (under normal circumstances) is that each month the amount you have paid in tax is compared with what you should pay in the whole tax year. The difference is then divided by the number of months remaining. So if your tax code changes in mid year excess payment taken prior to the notification is balanced by reduced tax payment in the remaining months.

chrisbur

The first payday after the new tax code is applied by your employer the total tax due up to that point in the tax year will be worked out on your total gross income up to that point in the tax year. Your tax paid up to that point in the tax year will be compared to that tax due figure and the difference will be the tax figure for that payday. This in effect will give you your tax adjustment going back to the beginning of the tax year. For the rest of the year you then get a reduction for the monthly value of the tax reduction.
If we assume that you are a 20% tax payer and paid monthly then your tax code has increased by 84 places so your tax allowance for the year would be up £840 which would be worth £168 to you in reduced tax for the year.
So assuming you were 2/3 of the way through the tax year you would get a reduction of 2/3 of £168 ie £112 in your tax. If you would normally pay say £200 you would then pay £88 that first month if you would normally pay £100 then you would get a refund of £12.
For each of the remaining four months (the other 1/3 of the year your tax would be reduced by 1/12 of £168 ie £14.

Cash-Strapped.T32

Hi, I'm in a similar position, although my tax code seems to have gone down.

My tax code has been 1100L all year, but as of 20/12/16, it has changed to 724L.

So in my December pay packet, despite earning less wage than I did last month (no overtime or expenses), I'm paying a higher amount of tax.
I earned £80 less basic wage this month, and am also paying over £50 more tax on-top...

Short history.
Apr 15 - Feb 16; Employed FT. Low wage (apx £16k per year pre tax)
Feb 16; Made redundant (very small payout as only been there 2yrs, statuary minimum)
Mar 16 - Jun 16; Temping for company A
Aug 16 - present; Temping for company B, first on a weekly basis, since November on a fixed-term contract.

Hope that makes sense?
Anyway, I received a letter from HMRC saying that my tax code has changed to 724L, the reason being;

--This is how we worked out your tax codes--
Tax-Free Amount; £1100.
Company B; £7245 of income is tax-free. Tax Code 724L X
Company C; £3755 of income is tax-free. Tax Code 375T
Note, I have not worked for company C since 2013.

What are they trying to express here?
* Are they under the mistaken belief I am or at any point have been working two jobs?
* Are they saying that since I have changed employers (let's leave out the fact I've not worked for company C since 2013) that if I change employer mid-year, that a pro-rata'ed amount of income is tax-free, based on how much of that year I worked for them?


I have posted in this thread as I didn't think I ought to go start a fresh one on a similar topic - If you think it would help to separate the two issues I'l be happy to open a fresh one & delete this.
I'm grateful for any advice! :cool:

MichelleUK

Cash-Strapped.T32 wrote: »

What are they trying to express here?
* Are they under the mistaken belief I am or at any point have been working two jobs?
* Are they saying that since I have changed employers (let's leave out the fact I've not worked for company C since 2013) that if I change employer mid-year, that a pro-rata'ed amount of income is tax-free, based on how much of that year I worked for them

HMRC think that you have two sources of income, so they have split your tax code between the two. Is company C paying you a pension?

If you only have one source of PAYE income, you need to tell HMRC so that they can correct the code.

Cash-Strapped.T32

Thanks Michelle,

No, company C are a temp agency that I was with for 7 weeks after ending one FT job and starting another - I'm clueless as to what they have to do with anything!

Anyway, on the strength of your reply, I just called HMRC (shockingly it was quick & painless, apart from the "talk to me" automated data-security system), now knowing what the problem is, the chap on the phone confirmed that they have me down as working two jobs, because Company A (who I was temping for from March to June) haven't sent them a P45 (nor have they sent one to me!) from when I ended with then earlier this year.

He told me he'd changed my tax-code then & there as from the pay-dates he could see I was only working one job, but told me I'd need to chase-up Company A to get a vopy of my P45 - at that point they can do a refund for the overpaid tax.

Wow... The first time that something like this has ever been straightforward - huge thanks again! :cool:

MichelleUK

Cash-Strapped.T32 wrote: »

Thanks Michelle,

No, company C are a temp agency that I was with for 7 weeks after ending one FT job and starting another - I'm clueless as to what they have to do with anything!

Anyway, on the strength of your reply, I just called HMRC (shockingly it was quick & painless, apart from the "talk to me" automated data-security system), now knowing what the problem is, the chap on the phone confirmed that they have me down as working two jobs, because Company A (who I was temping for from March to June) haven't sent them a P45 (nor have they sent one to me!) from when I ended with then earlier this year.

He told me he'd changed my tax-code then & there as from the pay-dates he could see I was only working one job, but told me I'd need to chase-up Company A to get a vopy of my P45 - at that point they can do a refund for the overpaid tax.

Wow... The first time that something like this has ever been straightforward - huge thanks again! :cool:

You're welcome - glad you had a good experience with HMRC!