No longer have company car

sunrise27_2

So after having a company car since forever hubby now has a car allowance and has private leased a car. Stupidly we thought as soon as soon as the tax code was issued he would no longer have any car benefit on there and would get the normal personal allowance code like everyone else ( how naive were we ) so we know understand he won'the get a 'normal ' personal allowance code until April 2019
But this is his first month of using his new ( non company car tax code ) and he has paid a silly amount of tax as in hardly any. Is that normal ? I'm assuming it's something to do with the change over ?

Dazed_and_confused

Sounds correct but you hadn't thought this through.

He has still had a company car for part of the year so his tax code needs to reflect this. If you simply removed the entry from his code then all the tax paid due to the car since April would be refunded.

He should now have a code with the car benefit apportioned to whenever it stop being available to him.

The first months pay using this code will be a one off but you can use this calculator to check what he will pay next month, you just need this months payslip and what you expect him to earn next payday to get a tax figure for next month.

http://payecalculator.hmrc.gov.uk/PAYE0.aspx

Does he use his own car for business journeys and if so is he getting 45p/mile from his employer or have they used the "claim from HMRC" option to get out of this?

sunrise27_2

Yes he does have a tax code that reflects the car benefit proportioned . So he should get the normal personal allowance tax code in April 2019 ?
So why does he pay so little tax this first month since the change ?

Dazed_and_confused

Yes, the car benefit should be removed from his 2019:20 tax code (he should be sent this early in the new (calendar) year).

He has been paying tax on a full years car benefit so far, say tax code 500L, and the new code has increased, to say, 750L so he has effectively been overpaying from April to now.

The benefit of that is felt in the first pay packet after the new tax code is used and then it will revert to normal afterwards (normal for the new tax code so it will still be less tax than earlier in the year but not as low as the last pay he has just received)

sunrise27_2

Perfect thank you . It was a very nice unexpected surprise even though we're scared to spend it as they might want it back in April lol