Confused About Tax Code 15 December 2022 at 1:39PM in Cutting tax 8 replies 190 views

craigjen2311

Hi,

Hoping someone can help me with a tax code query.

I handed my company car back on 22 Nov 22 and received my new car via a salary sacrifice scheme on the same day.  I was expecting my salary payment for December to be a bit higher as I’ve gone from a 2.0 diesel to a fully electric MINI, however I’ve actually received c£125 less in my salary.  

Previous tax code was S480L cumulative, and my new tax code is S415L W1/M1. My new tax code has the full benefit of both vehicles included within it. I don’t think this is correct however I have no idea how it all works. I was expecting my tax code to increase rather than decrease?  Any help would be greatly appreciated.

Benefit for diesel car £7763, benefit for MINI £230. Plus they’ve reduced my code by £425 for a £63 tax underpayment.

purdyoaten2

Quite simply HMRC has been advised of your new company car but not the removal of the old one. You need to contact them - 8am is best!

craigjen2311

Hi purdyoaten2,

Thanks for your reply.

I have contacted them and checked my personal tax account and it is showing correctly. They also told me that the tax code is correct. I still disagree! I just need someone to 
explain it to me. The adviser I spoke to didn’t really know how to.

Dazed_and_C0nfused

craigjen2311 said:

Hi purdyoaten2,

Thanks for your reply.

I have contacted them and checked my personal tax account and it is showing correctly. They also told me that the tax code is correct. I still disagree! I just need someone to 
explain it to me. The adviser I spoke to didn’t really know how to.

Is the original car still available to you?

If it isn't because you have returned this then why would youe tax code include the full annual amount?

craigjen2311

Dazed_and_C0nfused said:

craigjen2311 said:

Hi purdyoaten2,

Thanks for your reply.

I have contacted them and checked my personal tax account and it is showing correctly. They also told me that the tax code is correct. I still disagree! I just need someone to 
explain it to me. The adviser I spoke to didn’t really know how to.

Is the original car still available to you?

If it isn't because you have returned this then why would youe tax code include the full annual amount?

No the original car isn’t available to me, it has been returned. I don’t think it’s correct, but they are telling me it is 🤷‍♀️

purdyoaten2

Can you provide a full breakdown of the code shown in your personal tax account if this is correct?

craigjen2311

purdyoaten2 said:

Can you provide a full breakdown of the code shown in your personal tax account if this is correct?

Personal allowance £12,570 less £425 (£63 tax underpayment), less car benefit £7,993 (£7,693 old car + £230 new car, both full year benefits)  which gives a tax code of 4152. This code is lower than my previous code with my old car only which was 4800. My payslip also show W1/M1 instead of cumulative which suggests and emergency tax code? I’m just confused and no one at HMRC seems to be able to explain it to me.

craigjen2311

craigjen2311 said:

purdyoaten2 said:

Can you provide a full breakdown of the code shown in your personal tax account if this is correct?

Personal allowance £12,570 less £425 (£63 tax underpayment), less car benefit £7,993 (£7,693 old car + £230 new car, both full year benefits)  which gives a tax code of 4152. This code is lower than my previous code with my old car only which was 4800. My payslip also show W1/M1 instead of cumulative which suggests and emergency tax code? I’m just confused and no one at HMRC seems to be able to explain it to me.

Sorry £7,763 is the full benefit for my old car.

Albermarle

This happened to me once. It was simply an error by HMRC including both cars for 12 months, rather than splitting it, even though they had been correctly informed about the change.
I called them and it was corrected.