Company Car Tax!

Rywid12

I recently got a company car with my new job back in November. I updated the HMRC and have been taxed now in December a ridiculous amount. I’m in the 20% tax bracket and have paid over £900 in tax.

I have called the HMRC and they have informed me that this is correct and that the way they do is that they backdate it to April? I thought the car was going to cost me around £60 a month out of my salary out of my tax but being taxed this amount at Christmas with two young kids was not expected and I could of done with the money. I think I should be owed circa £400 at the lowest but they are telling me I’m not due anything?

Please can anyone clarify as I’m no tax expert but this just does not seem right to me?

Thanks

Penguin_

They don't, or at least shouldn't, back date it to April. They should be using the date you started using the car & calculating the Benefit In Kind tax from that date. 

Rywid12

Penguin_ said:

They don't, or at least shouldn't, back date it to April. They should be using the date you started using the car & calculating the Benefit In Kind tax from that date. 

I’ve spoken with three people now at the HMRC who have all said that’s correct though so I’m not really sure what I do from here though?

MattMattMattUK

Rywid12 said:

Penguin_ said:

They don't, or at least shouldn't, back date it to April. They should be using the date you started using the car & calculating the Benefit In Kind tax from that date. 

I’ve spoken with three people now at the HMRC who have all said that’s correct though so I’m not really sure what I do from here though?

What does it say on your pay slips regarding the amount deducted for this? What is the car?

Rywid12

MattMattMattUK said:

Rywid12 said:

Penguin_ said:

They don't, or at least shouldn't, back date it to April. They should be using the date you started using the car & calculating the Benefit In Kind tax from that date. 

I’ve spoken with three people now at the HMRC who have all said that’s correct though so I’m not really sure what I do from here though?

What does it say on your pay slips regarding the amount deducted for this? What is the car?

My payslips don’t specify anything regarding the car as it comes straight from my tax. The car is a PHEV Kia Xceed

MattMattMattUK

Rywid12 said:

MattMattMattUK said:

Rywid12 said:

Penguin_ said:

They don't, or at least shouldn't, back date it to April. They should be using the date you started using the car & calculating the Benefit In Kind tax from that date. 

I’ve spoken with three people now at the HMRC who have all said that’s correct though so I’m not really sure what I do from here though?

What does it say on your pay slips regarding the amount deducted for this? What is the car?

My payslips don’t specify anything regarding the car as it comes straight from my tax. The car is a PHEV Kia Xceed

What do you mean "comes straight from my tax"? Any deductions, including taxes, should be detailed on your payslip.

If you are a basic rate taxpayer for the 24/25 tax year the BIK tax for that car is £803 PA, if you are a higher rate taxpayer then it is £1,607 PA, do you earn more or less than £50,270?

Penguin_

Have you had a look on your personal tax online account to make sure the car details are correct? 

Rywid12

MattMattMattUK said:

Rywid12 said:

MattMattMattUK said:

Rywid12 said:

Penguin_ said:

They don't, or at least shouldn't, back date it to April. They should be using the date you started using the car & calculating the Benefit In Kind tax from that date. 

I’ve spoken with three people now at the HMRC who have all said that’s correct though so I’m not really sure what I do from here though?

What does it say on your pay slips regarding the amount deducted for this? What is the car?

My payslips don’t specify anything regarding the car as it comes straight from my tax. The car is a PHEV Kia Xceed

What do you mean "comes straight from my tax"? Any deductions, including taxes, should be detailed on your payslip.

If you are a basic rate taxpayer for the 24/25 tax year the BIK tax for that car is £803 PA, if you are a higher rate taxpayer then it is £1,607 PA, do you earn more or less than £50,270?

My payslip doesn’t specify anything for the car and I earn less than that. In a normal month before having the car I’d pay roughly £270 a month in tax and the first month of having the car I’ve paid over £900 and all I keep getting told is that that’s correct

Rywid12

Penguin_ said:

Have you had a look on your personal tax online account to make sure the car details are correct? 

Yeah it’s all correct so I can’t understand the huge deduction…

MattMattMattUK

Rywid12 said:

MattMattMattUK said:

Rywid12 said:

MattMattMattUK said:

Rywid12 said:

Penguin_ said:

They don't, or at least shouldn't, back date it to April. They should be using the date you started using the car & calculating the Benefit In Kind tax from that date. 

I’ve spoken with three people now at the HMRC who have all said that’s correct though so I’m not really sure what I do from here though?

What does it say on your pay slips regarding the amount deducted for this? What is the car?

My payslips don’t specify anything regarding the car as it comes straight from my tax. The car is a PHEV Kia Xceed

What do you mean "comes straight from my tax"? Any deductions, including taxes, should be detailed on your payslip.

If you are a basic rate taxpayer for the 24/25 tax year the BIK tax for that car is £803 PA, if you are a higher rate taxpayer then it is £1,607 PA, do you earn more or less than £50,270?

My payslip doesn’t specify anything for the car and I earn less than that. In a normal month before having the car I’d pay roughly £270 a month in tax and the first month of having the car I’ve paid over £900 and all I keep getting told is that that’s correct

Very odd, on that basis it should be £66.92 pcm deduction. On the basis of that tax (just Income Tax, not counting NI) then you are earning around £29k, have you checked to see if your tax for the year is correct, or if potentially HMRC are correcting an error in tax paid?

I would ask payroll to confirm what they have submitted for BIK and also ask them to break down the tax payable as something has gone wrong and I would suspect it is most likely there. 

molerat

What are your old and new tax codes including any prefix and suffix letters ?  If a cumulative code has been used then that would backdate the deductions to April so you would see a bigger deduction in the first month, but should not be the amount you have seen - possibly around £250, but much lower than the normal monthly amount going forward.