Change of tax code

redpete

agrinnall wrote: »

As it happens I've received the email below from HMRC ...

Your PAYE Income Tax records have recently changed. For security reasons we do not give the full details here but it could be because of a change in something like:
...

I received this email after I recently submitted a Self Assessment return. The change is to include an estimate of work related expenses (mileage) that I have claimed for the last two years.

Dazed_and_confused

I received this email after I recently submitted a Self Assessment return. The change is to include an estimate of work related expenses (mileage) that I have claimed for the last two years.

Interesting. There have been a few posts recently (here and the Pensions board) where people have mistakenly thought such an adjustment to the current year's tax code was in order to allow the tax relief due for 2017:18.

You have understood this better than plenty of people manage to!

dont_use_vistaprint

Dazed_and_confused wrote: »

Interesting. There have been a few posts recently (here and the Pensions board) where people have mistakenly thought such an adjustment to the current year's tax code was in order to allow the tax relief due for 2017:18.

You have understood this better than plenty of people manage to!

I think I have resolved it, it looks like they have added gift aid to my personal allowance to raise it up. Its not the correct figure and I dont know why they would do this - effectively giving me some gift aid relief through part time PAYE and some through annual SA / self employments, but I think I'm going to ignore until I get any formal notification. I put zero in the one off gifts box, so maybe they think its more sensible to pay relief monthly rather than annually

Dazed_and_confused

I don't have Gift Aid in my tax code so don't know how this looks on your Personal Tax Account but it is unlikely to ever look like the correct amount.

This is because you have already received some tax relief at source so the extra element in your tax code is calculated to give any additional relief due.

For example let's say you are well into higher rate tax and aren't Scottish resident for tax purposes.

Net Gift Aid is £800 so gross value = £1,000.

You have received £200 relief at source and are paying enough higher rate tax to be entitled to another £200 relief.

Your tax code adjustment would be £500.

By increasing your tax code allowances by £500 your employer would deduct £200 less tax (£500 x 40%).

Remember this tax code adjustment is only to give some provisional tax relief for 2018:19.

It isn't to give any of the Gift Aid relief due for 2017:18, that will all be included as part of your 2017:18 Self Assessment calculation.