Unexpected change in ta code

Jami74

Last week my tax code was 1375M

This week it is K2007X :eek:

Apparently my tax free amount is now -£5827

The only thing that has changed this week is that I paid the £206 I owe for self assessment for the 2018-2019 year.

BoGoF

You need see how your code is made up. That's a hefty reduction but there could be numerous reasons. Next months tax will be a lot!

Log onto your personal tax account and check your code.

xylophone

Have you checked your Personal Tax Account?

https://www.gov.uk/personal-tax-account

You can telephone HMRC.

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/self-assessment

Dazed_and_confused

If your tax code is K2007 then it means your tax code allowances are about -20070, not -5827.

That is a massive change in tax code terms so may well be wrong.

As well as checking how the tax code is made up when did you file your Self Assessment return?

Jami74

xylophone wrote: »

Have you checked your Personal Tax Account?

Yes

BoGoF wrote: »

You need see how your code is made up. That's a hefty reduction but there could be numerous reasons. Next months tax will be a lot!

How your tax-free amount is calculated:

Personal allowance £12500

Additions:
Marriage allowance £1250

Deductions:
Adjustment to rate band £2144
Estimated tax you owe this year £17433
(we estimate you have underpaid £3486)

Total tax free amount: -£5827

Tax code: K2007X
K = you have untaxed income which is more than your tax-free amount
2007 = £20070 needs to be added to your pay or pension so the extra tax can be collected
X = tax is based on each pay period

Job 1 (current job they have estimated income as £32000 but next week is my last week so it won't be that much)
Taxable income: £23772
Tax paid: £2692

Job 2 (still live but not currently earning)
Estimated Taxable income: £2195
Tax paid: £495

Job 3 (still live but not currently earning)
Estimated Taxable income: £4938
Tax paid: £987

Job 4 (ended)
Taxable income: £5675
Tax paid: £421

Jami74

Dazed_and_confused wrote: »

If your tax code is K2007 then it means your tax code allowances are about -20070, not -5827.

That is a massive change in tax code terms so may well be wrong.

As well as checking how the tax code is made up when did you file your Self Assessment return?

I completed them in April 2019. I do a tiny bit of self employed work and after claiming the traders allowance I owed £206 which I paid last week to make sure it got there in time for the 31/01 deadline. I've done even less this year and estimate my self assessment tax bill will be about £50.

And I've also earned about £40 in interest from savings this year. Last year I think it was about £10

Dazed_and_confused

I completed them in April 2019

I think the Self Assessment return is a red herring then.

But I can't understand the tax code figures.

The maths make sense. The tax code allowances are £13,750. The tax code reductions are £19,577.

£13,750 less £19,577 = £-5,827.

Completely lost as to why the tax code is then K2007???

Think this might be one for HMRC to explain!

Jami74

Dazed_and_confused wrote: »

I think the Self Assessment return is a red herring then.

But I can't understand the tax code figures.

The maths make sense. The tax code allowances are £13,750. The tax code reductions are £19,577.

£13,750 less £19,577 = £-5,827.

Completely lost as to why the tax code is then K2007???

Think this might be one for HMRC to explain!

Why would I have £19,577 deductions? I'm not sure what deductions mean.

You think it might have been paying the self assessment that upset things?

Edited to add:

I've just found this:

we estimate that you have not paid enough Income Tax so far this tax year. You currently owe

£1,315.89

How this will be collected
We will start to collect this amount straight away.

To do this we have reduced your tax-free amount by £17,433. This means that you will pay more tax until 5 April 2020, so that we can collect the £1,315.89 owed.

Your tax code has been adjusted for this.

Dazed_and_confused

You told me about the £19,577 reductions in your tax code

Deductions:
Adjustment to rate band £2144
Estimated tax you owe this year £17433
(we estimate you have underpaid £3486)

I don't think this is anything to do with Self Assessment or has any connection with you paying your Self Assessment bill.

Jami74

Dazed_and_confused wrote: »

You told me about the £19,577 reductions in your tax code

I've not seen the adjustment to rate band before, my total earnings will be well under £50,000 so can't be that.

And 'Estimated tax you owe this year £17433' can't mean they think I should pay that much in tax in a year, surely I'd have to earn over £100k to pay that much?

Oh well, those big numbers spooked me but I'm sure it'll all balance out eventually.

BoGoF

Do the other 'live' jobs have estimated pay figures on your PTA? It appears HMRC think you will be a higher rate taxpayer and that is the reason for the adjustment. If you can I would update the estimated pay from each source on your PTA or phone them. Otherwise 50% of your pay is getting deducted as tax next month.