K Tax Code

Griffin78

Hi,

I currently have a K tax code which I understand to be a negative allowance code. I'm obviously experiencing high tax due to this so wanted to ensure it sounded correct.
The exact code is K76 so not a huge number. Previously it was 936L.

The two main changes I have experienced are;
-Changing my car allowance from taking the cash to participating in the company car salary sacrifice policy. I deliberately chose a hybrid vehicle to ensure the BIK was low - £5786
- We were receiving child benefit but when we earned more than the family maximum (6 months ago) I proactively registered for self assessment and provided my earnings and BIK info directly with HMRC.
During this period my earnings have increased by approx 5% and are approx £60K pa.

I find it hard to believe my BIK exceeds my allowance. Is there a chance that I registered for self assessment and provided my BIK and my employer also did this resulting in it doubling? I have no idea. Going from a tax code of 936 to a K code via a low CO2 company car seems unrealistic?

agrinnall

Log in and check your personal tax account, it should tell you what the basis for the code is.

Berkshire_Beancounter

I think you've had a double whammy here - the benefit in kind of your company car is deducted from your tax code. By itself, I would have expected your tax code to have changed from 936L to something like 357L for the car.

BUT from my understanding, benefits in kind are also treated as additional income for clawing back child benefit. So the difference, if you can check your tax code breakdown online as agrinnall suggests, is probably an increased clawback of the child benefit charge. Earning as much as you do, with the benefit in kind, all the child benefit is clawed back.

Griffin78

Thanks for the feedback. It looks like I owe about £1K in tax this year so they have altered my code to recoup this. They have essentially deducted about £6K from my allowance so they can receive this.

xylophone

Are you in a position to increase your pension contributions?

https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/reduce-high-income-child-benefit-charge/