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new tax code

hi everyone. new to this. my tax code changed this week & i'm now £80 a week worse off! my question is, is this for the duration of this tax year or is it because i recieve a hm forces pension? 

Comments

  • i should add its gone from 750l to k456
  • Rodders53
    Rodders53 Posts: 2,625 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    https://www.gov.uk/employee-tax-codes/letters

    Tax codes with the letter ‘K’

    The letter K is used in an employee’s tax code when deductions due for company benefits, state pension or tax owed from previous years are greater than their Personal Allowance.


    You should have had (or shortly receive) a notice of coding from HMRC which will explain the detail?  

  • i have pal but not sure for why? my forces pension or just owe from previous yrs? and for how long?! i can't find anything as to how long i'll be paying it back/paying more.
  • sheramber
    sheramber Posts: 22,011 Forumite
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    You would be better posting this in the  cutting tax thread  with details of how your code number is made up.
     
  • calcotti
    calcotti Posts: 15,696 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 13 June 2020 at 2:56PM
    If your forces pension is new then HMRC have to decide how to collect the tax due. Obviously if your income has increased you will have more tax to pay. Sometimes they allow the whole of your personal allowance against one source of income and tax the others at BR (20% on all of that income), other times they spilt the annual allowance between the different sources of income. You need to look at how the tax codes for all your sources of income work not just at one in isolation.
    However I agree with sheramber this may be better in the Cutting Tax forum.
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • Rodders53
    Rodders53 Posts: 2,625 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    Read the notice... Both sides. To seek the explanation?  
    Call HMRC on Monday if you are still unclear or wish to contest the coding, perhaps?

    But it seems you have paid too little tax in 2019-20 tax year (or maybe even earlier) and they are taking it back this tax year 2020-21 by making all your Personal Allowance (£12,500) plus K456 (£4560) taxable.  So you must have had £17,060 of taxable income (perhaps your Forces pension, or savings interest, or company car benefit in kind, taxable benefits https://www.gov.uk/income-tax/taxfree-and-taxable-state-benefits or ???) that was not taxed, for whatever reason.  (20% of £17,060 = £3,412/52 = £65.62 per week so is broadly in line with your £70 reduction).

    It should mean the owed tax will be repaid over the next 12 months unless this applies Employers and pension providers cannot take more than half your pre-tax wages or pension when using a K tax code 
    If so, it may continue (recalculated) into the next tax year.

  • cheers all. i've been self employed between aug 2016 & jan 2020. went back paye end of jan.
  • sheramber
    sheramber Posts: 22,011 Forumite
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    You will pay that amount of tax as long as that is your code number and your income stays  the same.
    Why your code number is as it is can  only be explained by reference  to the figures on the notice of coding which w don't know.

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