Help: Tax Code changed to K42 and knocked £300 off my salary. I don't understand?

LiveOnce

Tax code was wrong

[Deleted User]

Breakdown of code?

Dazed_and_confused

You should have had a tax code letter from HMRC explaining how the code has been calculated.

If you don't have that then you could log into your personal tax account on gov.uk to check how the code has been calculated.

It's likely to be M1 (never heard of M2) which means the code is only being applied from now on and not back dated to the start of the tax year last April. If you have paid an extra £300 it would suggest you have built up quite a large tax underpayment over the past few months (though that of course is assuming K42 is the correct code).

Without knowing the make up of the code it is difficult to say any more.

Linton

Note that K42 means you have a negative tax allowance of -£420 so you are being taxed on taxable pay + £420/12. What was the previous code? Why was it changed? If the difference is £300 it seems you are a higher rate tax payer?

LiveOnce

Tax code was wrong

Dazed_and_confused

Most people get a personal allowance which is £11000 this year so medical insurance on its own wouldn't have that dramatic an effect.

The tax due, for a whole year, on £490 would be in the range £0 - £220

Are you earning more than £100,000?

LiveOnce

Tax code was wrong

Dazed_and_confused

How is your tax code for this year (2016:17) made up?

Removing the medical insurance is probably going to save you £98 (basic rate payer) or £196 (higher rate payer) over a full tax year so a drop in the ocean really.

Have you changed jobs during this tax year?

What does your personal tax account show your earnings are expected to be this year?

LiveOnce

Tax code was wrong

Dazed_and_confused

On your personal tax account, there is a PAYE section and you should be able to get tax code details from there, specifically how the K42 has been calculated.

To be honest I think the £300 is the least of your problems, an underpayment of £8100 will mean extra tax of £675 per month from April so if this is wrong you need to get it sorted asap

LiveOnce

Tax code was wrong