tax code confusion

davesdaughter

my husband has two jobs, one full time and one as an on-call firefighter. We have just received his tax code notice for 18/19 and the tax code for his main job is 445T. For some reason his personal allowance is only £4830, and he has flat rate job expense allowance of £60 but has an adjustment of £435 for underpaid tax last year giving a total tax-free amount of £4455

The notice states that for his second job he has £0 tax free allowance so i can't work out why his personal allowance has been reduced. He doesn't earn over 100k so i can't work out why his pa has been reduced?

I've checked his current payslip and his current tax code is 498T so it looks like the pa has been reduced this year too.

badmemory

Would his total earnings put him in the 40% tax bracket? If so they are getting back underpaid tax from a previous year.

xylophone

Has he looked at his personal tax account?

https://www.gov.uk/personal-tax-account

polymaff

davesdaughter wrote: »

... He doesn't earn over 100k so i can't work out why his pa has been reduced?

... so it looks like the pa has been reduced this year too

His "pa" has not been reduced.

You are muddling his Personal Allowance with his PAYE tax code.

His PAYE tax code is less than his Personal Allowance because HMRC considers that he is / will be liable to tax and want to collect it via PAYE.

Get that understood amd you should be able to work out why.

Dazed_and_confused

polymaff

Have to disagree on this one.

The first post states the tax code was made up of
Personal Allowance 4830
Plus Flat rate expenses 60
Less underpayment adjustment 435
Net allowances 4455 = tax code 445T

The logical explanation for this is that for some unknown reason HMRC have estimated his income to be over £100k for 2018:19.

As xylophone suggests, the quickest way to check this is by looking at the hubbies personal tax account. Haven't done it myself but I think others have posted that you can update your income details (for next year in this instance) via your personal tax account and presumably that would initiate an updated tax code for 2018:19.

polymaff

Dazed_and_confused wrote: »

Have to disagree on this one.

Disagree with what? The point of my post was that as far as the P2 calculation is concerned, an individual's Personal Allowance is a constant - not as twice stated by the OP - and is just one input to the computation of PAYE Tax Codes - not vice-versa.

Can you disagree with that?

It'd be interesting to know what is the Personal Allowance Total on the P2. That'll clarify the situation.

Dazed_and_confused

This,

His "pa" has not been reduced

Given the info in the op I think it is clear the PA has been reduced on this occasion.

In my experience tax codes can cope with the reduced Personal Allowance for income over £100k and to me that is the only logical explanation for the info the op originally provided,

We have just received his tax code notice for 18/19 and the tax code for his main job is 445T. For some reason his personal allowance is only £4830, and he has flat rate job expense allowance of £60 but has an adjustment of £435 for underpaid tax last year giving a total tax-free amount of £4455

polymaff

Dazed_and_confused wrote: »

Given the info in the op I think it is clear the PA has been reduced on this occasion.

Only if you take the OP's statements as bible.

Let's wait for that P2 data from the OP

jimmo

davesdaughter wrote: »

my husband has two jobs, one full time and one as an on-call firefighter. We have just received his tax code notice for 18/19 and the tax code for his main job is 445T. For some reason his personal allowance is only £4830, and he has flat rate job expense allowance of £60 but has an adjustment of £435 for underpaid tax last year giving a total tax-free amount of £4455

Does he by any chance have a pension as well?
Traditionally T suffix codes were used for "secondary" sources of earned income where the main source had an L or H suffix. . Where there is more than one source HMRC tend to choose the source most likely to be permanent such as a pension even where the earnings are greater. That would explain it.

Dazed_and_confused

Jimmo,

That would explain the full Personal Allowance being split between tax codes but it seems clear from the op that the Personal Allowance shown in the code had been reduced.

And that can only happen of the adjusted net income is believed to be over £100k.

Hopefully the op will be back at some point to explain what's happened next.

jimmo

Dazed and confused,
You probably already know this but the original concept of code suffixes was:
L = Lower Personal Allowance (single people and married women.
H = Higher Personal Allowance (married men)
T = Transfer. A subsidiary source of income the details of which were to be transferred to the individuals main Tax Office each year. There other code suffixes connected with Age Allowances. Back in those days the annual Budget took place in April and everything was kept top secret until the Chancellor gave the Budget Speech to Parliament. There were no prior announcements or leaks and the measures announced took immediate effect. The quickest way to put the budget changes to Personal Allowances into effect was then to instruct employers to increase L codes by a set amount and H codes by a different amount. T codes remained unchanged. All that's pretty obsolete nowadays of course.
I have no real idea whether the OP's husband has a pension so could easily be barking up the wrong tree but as an example if he has an annual pension of £7020 his 2018/19 pension coding would be:
Personal allowance £11850.
Less Allocated to employment 4830
Net allowance 7020
Code 702L
In that way he would suffer no deductions from his pension and the coding for the full time employment would be:
Fixed rate expenses £60
Personal Allowance £4830
Total £4890
Code 489T.