Tax Code Question

SoVain

Good evening everyone, I worked as a postman for 14 years but left to start a new career in the middle of April. I purposely left after I received my second allocation of shares from the company. I was sent my final tax code from RM which was 1162L and have now forwarded that on to my new employer.

I have now received a letter regarding my shares (which I only had for 3 years so I knew I would pay tax and NIC on them) stating that deductions on these shares would be calculated on tax code 0T. Is this correct? If so would I be entitled to a tax refund further along the line?

Thanks for reading and I hope someone can point me in the right direction.

00ec25

payments made after you left the company (ie after you were given your P45) must be against tax code 0T as your actual tax code per your P45 will by then be in use by your new employer. So if RM had paid you the "late" payment using your old tax code you would have underpaid your tax. 0T is therefore the correct code for RM to use and assuming your new career does put you into the 40% tax bracket, 0T means you will pay the correct amount of tax on the shares so will not be entitled to a refund as you will not have overpaid anything.

as for code 1162 is that still valid at your new job? The standard code should be 1150, you had 1162 at RM presumably because you were entitled to a washing your RM uniform allowance of £120 per year allowance (ie 1150+12 = 1162)? Do you get the same uniform allowance in the new career? If not, it is your responsibility to inform HMRC that your tax code needs to be adjusted or you will underpay tax in your new job.

SoVain

00ec25 wrote: »

payments made after you left the company (ie after you were given your P45) must be against tax code 0T as your actual tax code per your P45 will by then be in use by your new employer. So if RM had paid you the "late" payment using your old tax code you would have underpaid your tax. 0T is therefore the correct code for RM to use and assuming your new career does put you into the 40% tax bracket, 0T means you will pay the correct amount of tax on the shares so will not be entitled to a refund as you will not have overpaid anything.

as for code 1162 is that still valid at your new job? The standard code should be 1150, you had 1162 at RM presumably because you were entitled to a washing your RM uniform allowance of £120 per year allowance (ie 1150+12 = 1162)? Do you get the same uniform allowance in the new career? If not, it is your responsibility to inform HMRC that your tax code needs to be adjusted or you will underpay tax in your new job.

My new career does not put me in the 40% bracket so does this make any difference?

Again, yes I do have to wash my uniform in my new job so I am guessing my code is correct?

Thank you.

chrisbur

SoVain wrote: »

My new career does not put me in the 40% bracket so does this make any difference?

Again, yes I do have to wash my uniform in my new job so I am guessing my code is correct?

Thank you.

Difficult to answer precisely without seeing the figures involved. but broadly....

It is your total taxable income for the year that will decide if you are in the 40% band.
For your employments taxed under your code of 1162L you get a tax free allowance then a 20% band allowance then a 40% band allowance etc
On a code of 0T non-cumulative you are given no tax free allowance and then a proportion of taxable allowances depending on your pay period so for example if you were paid monthly you get 1/12 of the 20% tax band, 1/12 of the 40% tax band etc.

So if your total taxable income does not take you into the 40% band and you did not pay any 40% tax on your 0T code then your tax will be correct.

If your total taxable income does not take you into the 40% band and you did pay some tax at 40% on your 0T code then you will have over-paid tax.

If your total taxable income is into the 40% band you will have underpaid tax on your 0T code as you will have been given to much allowance at 20%

Regarding your tax code there are different allowances so might not be the same in your new employment.

dori2o

Regarding the laundry allowance.

It applies for the whole tax year even where you start/leave an employer part way through.

This means the £120 will remain in your code for the whole tax year so long as you received at least £120 income from royal mail. If you received less then the allowance would be restricted to the value of the income received.

If you are due an allowance for laundry/flat rate expenses in your new job, then for this year you can claim this on top of the allowance due for your employment at royal mail.

However from the start of the next tax year you would only be eligible for whatever additional allowance applies to that job/trade.