Tax code question

Hamiltonc

Next tax year, HMRC will need to collect £778.05 from me.  This will be via my tax code.

What's the calculation to work out my new tax code please with this deduction?

Thank you 

molerat

If you are a 20% tax payer they will reduce your allowance by 5 times the underpaid tax amount so around a £3890 deduction, 20% of £3890 is £778.  £12570 - £3890 = £8680 so a code of 868 (assuming there are no other code affecting factors in play)

Hamiltonc

molerat said:

If you are a 20% tax payer they will reduce your allowance by 5 times the underpaid tax amount so around a £3890 deduction, 20% of £3890 is £778.  £12570 - £3890 = £8680 so a code of 868 (assuming there are no other code affecting factors in play)

What if higher rate tax payer?

Dazed_and_C0nfused

Then the deduction would be half, £1,945.

This would mean you would pay extra tax on £1,945 of your earnings.

£1,945 x 40% = £778

Hamiltonc

Dazed_and_C0nfused said:

Then the deduction would be half, £1,945.

This would mean you would pay extra tax on £1,945 of your earnings.

£1,945 x 40% = £778

So what would new tax code be?

[Deleted User]

Hamiltonc said:

Dazed_and_C0nfused said:

Then the deduction would be half, £1,945.

This would mean you would pay extra tax on £1,945 of your earnings.

£1,945 x 40% = £778

So what would new tax code be?

On the basis that you pay at least 1945 of your salary at 40% rate and you are on the standard code of 1257L at the moment, it will be 1080L. (12750 less 1945 is 10805) 

eskbanker

purdyoaten2 said:

On the basis that you pay at least 1945 of your salary at 40% rate and you are on the standard code of 1257L at the moment, it will be 1080L. (12750 less 1945 is 10805) 

Presumably, as 12570 less 1945 is 10625, it would be 1062L!

[Deleted User]

eskbanker said:

purdyoaten2 said:

On the basis that you pay at least 1945 of your salary at 40% rate and you are on the standard code of 1257L at the moment, it will be 1080L. (12750 less 1945 is 10805) 

Presumably, as 12570 less 1945 is 10625, it would be 1062L!

That selective dyslexia again!

Cocoblue

I need help understanding my tax code, It is currently K6/0 and not sure what this means. I do have a car allowance with the company I work with. Can someone help please.

Dazed_and_C0nfused

It means very little on its own other than your tax code deductions are slightly more than your tax code allowance.

You really need to have the breakdown of how the K6 code has been calculated to make more sense of it.

[Deleted User]

Cocoblue said:

I need help understanding my tax code, It is currently K6/0 and not sure what this means. I do have a car allowance with the company I work with. Can someone help please.

Car allowance or company car?