BR Tax Code Help

dont_use_vistaprint

Just found out been on BR since July so not saved enough for next year.

Can anyone help estimate how much a month one should save on this code, earning 97.5 plus £3500 in medical benefit, no other PAYE type income or benefit, no cars etc. Other SE income , CB tax, interest, capital gains, gift aid in SA etc but just want to initially work out the PAYE variance as it looks like its a permanent code for me with overseas employer.

Thanks

00ec25

well BR is the code for everything at 20%

yet you earn 100k + have other income on top of that so you have a big problem since a) not only do you owe the extra 20%, but b) you may well be > 100k, in which case no personal allowance anyway so owe even more

why not just use one of the very many online tax calculators if you want a rough estimate

Dazed_and_confused

And then contact HMRC and ask for your tax code to be adjusted.

Tax code 0T would be preferable as this at least allows some 40% tax to be deducted.

surreytech

1- Use your payslips to estimate gross income and total tax you will pay by the end of the current tax year. Your last payslip should have gross income and tax paid to date in the current tax year. Do the maths to calculate the figures for the 12 months. Then add all the benefits (e.g. medical) to the total. By the way I am assuming you haven't had another employment in this tax year before July. If you did, you will need to add the gross income and tax paid to the figures you calculated in this step.
2- Use an online tax calculator to determine how much tax you will need to pay for the figure you calculated in step 1.
3- The difference between total tax to pay (obtained in step 2) and total tax you will pay (step 1) is what you will owe.

If your adjusted net income is over £100k, you will need to do a Self Assessment tax return if you are not doing it already (See the page entitled "Income over £100,000" on HMRC website). You will then pay any underpaid tax through Self Assessment. However, as mentioned by other users, it is better to ask HMRC to update your tax code so that you start paying the tax you owe via PAYE and face a smaller tax bill.

dont_use_vistaprint

00ec25 wrote: »

well BR is the code for everything at 20%

yet you earn 100k + have other income on top of that so you have a big problem since a) not only do you owe the extra 20%, but b) you may well be > 100k, in which case no personal allowance anyway so owe even more

why not just use one of the very many online tax calculators if you want a rough estimate

Thanks I didn't realise you lose personal allowance if you earn over 100K. Is that just from PAYE or total income on self assessment ?

I assume you can get it back by making a one off pension contribution before April to take total PAYE just below 100 ?

Dazed_and_confused

The amount of the Personal Allowance is based on your "adjusted net income", not taxable income.

So it's quite possible to have taxable income in excess of £100k but adjusted net income of less than £100k and therefore retain full Personal Allowance.

For example pension contributions to a relief at source pension scheme (typically a personal pension or SIPP) do not reduce your taxable income. But they do reduce your adjusted net income and also increase the amount of your basic rate tax band, which in turn can reduce the amount of higher rate tax payable.

For example if your taxable income was £110,000 and you contributed £10,000 to a personal pension (you paying £8,000 plus the 25% tax uplift) then your taxable income is still £110,000.

But your adjusted net income is only £100,000 and your basic rate tax band is £47,500, not £37,500.