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Handed back company car - tax code has been adjusted ... but not to what I expected?
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SillyTart2016
Posts: 4 Newbie

in Cutting tax
I've been driving a company vehicle for many years now always paid the tax on it. This Saturday gone however I purchased my own car and physically handed back my company car
Updated HMRC online and they adjusted my tax code from 318L to 985L - think I am being thick as I assumed it would revert back to 1257L ?
Just phoned HMRC to check and they said that as my P11D was submitted with a car then my code would not revert to 1257L until the next tax year?
So am I paying for a car that I am no long driving? Can someone please explain in very very simple terms for me? 😊
There is a massive difference (to me anyway) between 318L and 1257L, so although 985L is better its not what I was expecting ...
Thank You very much in advance 😊
Updated HMRC online and they adjusted my tax code from 318L to 985L - think I am being thick as I assumed it would revert back to 1257L ?
Just phoned HMRC to check and they said that as my P11D was submitted with a car then my code would not revert to 1257L until the next tax year?
So am I paying for a car that I am no long driving? Can someone please explain in very very simple terms for me? 😊
There is a massive difference (to me anyway) between 318L and 1257L, so although 985L is better its not what I was expecting ...
Thank You very much in advance 😊
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Comments
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Why it would go to 1257L when you have had a company car for 4 months?
Don't you think you should pay tax on having the car for those four months???1 -
Hi - I'm not quibbling that
My tax code has been 318L since April 2022 - I *thought* that was paying for the car ? Every single month - not the whole year?!
This is what I don't understand - if someone can explain in simple terms please! Thank You 🙃1 -
You have to pay tax for the whole year on a company car, handing it back part way through the year doesn't get you out of paying the tax!
You were originally paying tax on c£9,390.
Now you are paying tax on c£2,720.
Watch out for a nice refund next pay day.1 -
But if your code was reverted back to 1257 that would operate back to April and you would not be getting charged for the 4 months of having the car. In fact you would be refunded the extra tax you had already paid resulting in an under payment at the end of the year.
By changing it to 985 that adjust your code to charge the 4 moths tax due over the 12 moths for April 22 to April 23 as 985 will operate back to April.1 -
Thank You! Did warn you I'm thick (hence the user name!)
You're right - I do expect to see more in my take home (just not as much as I was expecting!) As long its right though ... every penny counts at the moment and HMRC are not always correct 😉
THank You again!0 -
Tax code is for the whole year (unless it ends M1 or W1 or X).
So if you went back to 1257L you would receive a tax refund for the tax paid on the car to date.1 -
Hi, Sorry to reactivate an old thread. I have this same issue except I’m switching from a diesel to a PHEV and from reading this I now understand why the tax code hasn’t changed as much as I thought it would. As previously said it has to reflect the whole year. But how and when do you get refunded for the extra tax you will pay. I take it you get a refund to make the tax paid correct.0
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Gunner98 said:Hi, Sorry to reactivate an old thread. I have this same issue except I’m switching from a diesel to a PHEV and from reading this I now understand why the tax code hasn’t changed as much as I thought it would. As previously said it has to reflect the whole year. But how and when do you get refunded for the extra tax you will pay. I take it you get a refund to make the tax paid correct.
Has the new one been issued on a cumulative or non cumulative basis?
Non cumulative sometimes shows as having an X, W1 or maybe W1/M1 after it.0 -
Hi, old code was 579L new code is 765L0
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What was the taxable value of the old car and what is the new ?Old / 12 x Z months + new / 12 x Y months should be your total taxable value for the year.Is that figure around £1860 less than the old amount ?Providing that 765L does not have an X, M1 or W1 suffix you will be paying tax on £155 less per month so for Dec that will be on £1395 (Apr - Dec's £155s) giving an extra £279 in your pocket if a basic rate tax payer, more if higher rate, and £31 per month for the rest of the year.0
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