Tax Code

Spudaustin
Spudaustin Posts: 3
First Post
Newbie
edited 21 July 2021 at 9:30AM in Cutting tax
I applied for the working from home tax break last year and received it without issue. When I applied this year once again allowed me other expenses worth £312 however they have also added you now get Adjustment to rate band worth £1,087. This has moved my tax band down from 1257L to 1179L so I am actually worse off. Can anyone explain why this has happened?

Comments

  • Do you have two jobs/pensions?

    You need to look at your Personal Tax Account to get the full picture but if you don't have a second job then something has probably gone wrong.
  • Do you have two jobs/pensions?

    You need to look at your Personal Tax Account to get the full picture but if you don't have a second job then something has probably gone wrong.
    I do have a second job which is taxed at BR but I had that last year and it didn't lower my code. I suppose it is frustrating if my second job lowers my tax code since I am paying 20% on all earnings. If I knew it was going to lower my personal allowance I wouldn't have applied for it
  • Your Personal Allowance only gets reduced if you have adjusted net income in excess of £100k.

    Your tax code allowances will look at your overall tax position so sometimes deducting 40% tax on a second job would be excessive but you are due to pay 40% tax on some of the second job pay.  HMRC's way of dealing with that is by using the adjustment to rate band deduction in your main tax code.

    And you continue to pay just 20% on the whole of the second job.

    You should check HMRC's estimate of your taxable pay (what will be shown on your next P60) is correct for both jobs.
  • Your Personal Allowance only gets reduced if you have adjusted net income in excess of £100k.

    Your tax code allowances will look at your overall tax position so sometimes deducting 40% tax on a second job would be excessive but you are due to pay 40% tax on some of the second job pay.  HMRC's way of dealing with that is by using the adjustment to rate band deduction in your main tax code.

    And you continue to pay just 20% on the whole of the second job.

    You should check HMRC's estimate of your taxable pay (what will be shown on your next P60) is correct for both jobs.
    I certainly do not have a net income of 100k lol I'll phone them to see what is going on. Thanks for this information it has been very helpful
  • JackD_3
    JackD_3 Posts: 7
    First Post First Anniversary Combo Breaker
    Forumite
    Sounds as though your estimate pay is incorrect.

    Check your PTA or give them a call

    As what other items form part of your tax code
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