Received notification of K tax code

ahsan

I have recently changed my job and I got paid for 2 days in August from previous employer and rest of the month by new employer. Both salaries were deposited into my bank account on 25th August. I actually received a tax refund included on the payslip from former employer. However I have received a letter last week notifying me that due to in Year adjustment I will owe money to HMRC and they have change my tax code to K629X.

I have tried various online calculators but I don’t know how to work out right tax amount for partial year on earnings from former employer. I think I paid the correct amount of tax through previous employer except last month where there was an unexpected tax refund.

Can someone provide guidance how to work out if HMRC’s calculations are right. I don’t think they are but not sure how to be confident around it before I call them.

Last time when my employer changed it took over 6 months to resolve issue after involving my MP.

please help…

xylophone

 I actually received a tax refund included on the payslip from former employer. 

This is what has caused the problem?

https://taxaid.org.uk/guides/taxpayers/tax-for-employees/changing-jobs-and-new-employments#:~:text=The tax codes for someone,the former employer is delayed.

Contact HMRC about your K tax code

If you have a K code and you don’t have any company benefits and have not been sent an explanation from HMRC you will need to get in touch with HMRC (contact information here) to find out.

The tax office normally send you a notice of coding P2 which gives you information on how they have worked out your K tax code. The content of your notice of coding should be checked by you for accuracy.

A K code can be amended but sometimes HMRC needs you to help them get your code right by contacting them to let them know why an adjustment is needed.

https://listentotaxman.com/ might help.

Dazed_and_C0nfused

It is likely to be wrong as I suspect it is a tax code calculated for your new employer before your original employer sent HMRC their final details.

In which case HMRC's calculation would presumably have assumed you would continue to be paid by your original employer.  Which is now known to have changed given you have left that job.

Can you post the make up of the code?

ahsan

Dazed_and_C0nfused said:

Can you post the make up of the code?

Thank you for the responses from everyone.

How do I do that ? is it the following 

K - you have untaxed income which is more than your tax-free amount. This has been added to your pay so that extra tax can be collected

629 - £6,290 needs to be added to your pay so that extra tax can be collected

X - your tax is based on your pay in each period, not the whole year. This stops you paying too much tax in one go

When I logon into the gov.uk with my gateway id I can see the correct end date against former employee so I assume they know I have left them. Also a P45 was also issued.

The new employer used 1257L on the first payslip. 

The only odd thing is the amount in “Your PAYE Income Tax estimate” section it is quoting about £45,000 more than I am actually going to get. So I have no idea where this figure came from. 

Dazed_and_C0nfused

ahsan said:

Dazed_and_C0nfused said:

Can you post the make up of the code?

How do I do that ? is it the following 

K - you have untaxed income which is more than your tax-free amount. This has been added to your pay so that extra tax can be collected

629 - £6,290 needs to be added to your pay so that extra tax can be collected

X - your tax is based on your pay in each period, not the whole year. This stops you paying too much tax in one go

When I logon into the gov.uk with my gateway id I can see the correct end date against former employee so I assume they know I have left them. Also a P45 was also issued.

The new employer used 1257L on the first payslip. 

The only odd thing is the amount in “Your PAYE Income Tax estimate” section it is quoting about £45,000 more than I am actually going to get. So I have no idea where this figure came from. 

Somewhere in the PAYE section of your Personal Tax Account you should be able to find a link which provides the detail of how the K code has been calculated, that's what's key.

There could be literally millions of ways of arriving at the negative tax code allowances, you need to know how yours has been arrived at.

It could well be an adjustment to rate band and/or in year adjustment (estimated tax owed for 2023-24).

Which may have been accurate on the day the tax code was calculated but needs reviewing again now that your old employer has filed your final pay details.

Essentially this is a mix of a timing issue (new employer submits info before the old one did) and having two jobs(for tax purposes) in the same tax month.

Neither employer is likely to have done anything wrong, it just gets a bit messy sometimes the sequence of events isn't quite as the tax system was designed for.

xylophone

Have you received a P2?

https://www.protaxaccountant.co.uk/post/p2-tax-notice#:~:text=What Is a P2 Tax,tax year beginning in April.