Query with my tax code after handing my company car back.

unholyangel

Brewer2000 wrote: »

Hi,
You are correct it is personal allowance and the additional £120

I have received an allowance in place of the car yes and that does come to around £5670

Sounds like that is my answer. ��

Did you remove the car benefit or did HMRC?

If you removed it, you may end up with an underpayment if you had the car for part of the year - as the car benefit should remain in your code for the year but the amount would be apportioned for the period of time you did have it.

Brewer2000

Hi

HMRC removed it in April.

At the time I had told them about my pay increase but they still made it sound like I would be saving the £5670. Does not look like that is the case.

Had i of known i may have kept the company car as now I need to cover the maintenance costs with no extra savings.

The additional allowance only covers the monthly costs to buy the car.
At least I own the car so there is that.

Thanks for the info

Dazed_and_confused

Not having the car benefit is saving you somewhere in the region of £1,100 - £2,200 (exact amount depends on what tax rate(s)the tax due on the benefit was).

But you now have an extra (taxable) cash payment of £5,670 so owe somewhere in the region of £1,100 - £2,200 tax on that.

Basically one has cancelled the other.