Tax code query

SJS5

Hi Could someone please help me understand my tax code. ?
I have just contacted HMRC and given info at their request regarding my expected interest on savings  next year.


I am a basic tax payer.

My usual tax code is 1302L

It was lowered this year to 1025L to account for tax on interest 

A recent tax code letter advised next year it would be lowered to 690L as I owed them £750 and I assumed they had also calculated by interest on savings for this year as well.


They asked for the actual  interest details for year 2025 -2026, which  will be around  £4480. ( I have fixed rate accounts so it could be calculated)

They informed me then that my tax code for next year will be now be 448L.

I can't work out why?

I would get 1k of that without paying tax.

Which would leave interest on savings of £3480

I tried to ask but was cut off.

Any ideas thankyou .

DRS1

They asked for the actual  interest details for year 2025 -2026, which  will be around  £4480. ( I have fixed rate accounts so it could be calculated)

They informed me then that my tax code for next year will be now be 448L

Sounds like a massive coincidence.

Hoenir

Do you have an online Personal Tax Account? If not, it's worth doing so. As makes basic administration of many things far easier. 

https://www.gov.uk/personal-tax-account

Dazed_and_C0nfused

SJS5 said:

Hi Could someone please help me understand my tax code. ?
I have just contacted HMRC and given info at their request regarding my expected interest on savings  next year.


I am a basic tax payer.

My usual tax code is 1302L

It was lowered this year to 1025L to account for tax on interest 

A recent tax code letter advised next year it would be lowered to 690L as I owed them £750 and I assumed they had also calculated by interest on savings for this year as well.


They asked for the actual  interest details for year 2025 -2026, which  will be around  £4480. ( I have fixed rate accounts so it could be calculated)

They informed me then that my tax code for next year will be now be 448L.

I can't work out why?

I would get 1k of that without paying tax.

Which would leave interest on savings of £3480

I tried to ask but was cut off.

Any ideas thankyou .

No one can answer that without knowing why your tax code is normally 1302L, which is a fair bit higher than the standard 1257L code.

Based on what you have posted you are likely to have two tax code deductions,

£3,480 for the estimated interest for 2025--26
£3,750 two collect the underpayment of £750

12570 - 3480 - 3750 = tax code allowances of 5340.

But if you then deduct the extra tax code allowances of ~450 you had in your "usual" code that takes it down to 4890 (= tax code 489L)

Not a million miles from your 448L.

But as ever with tax the devil is in the detail and you can see that in your Personal Tax Account.

SJS5

Dazed_and_C0nfused said:

SJS5 said:

Hi Could someone please help me understand my tax code. ?
I have just contacted HMRC and given info at their request regarding my expected interest on savings  next year.


I am a basic tax payer.

My usual tax code is 1302L

It was lowered this year to 1025L to account for tax on interest 

A recent tax code letter advised next year it would be lowered to 690L as I owed them £750 and I assumed they had also calculated by interest on savings for this year as well.


They asked for the actual  interest details for year 2025 -2026, which  will be around  £4480. ( I have fixed rate accounts so it could be calculated)

They informed me then that my tax code for next year will be now be 448L.

I can't work out why?

I would get 1k of that without paying tax.

Which would leave interest on savings of £3480

I tried to ask but was cut off.

Any ideas thankyou .

No one can answer that without knowing why your tax code is normally 1302L, which is a fair bit higher than the standard 1257L code.

Based on what you have posted you are likely to have two tax code deductions,

£3,480 for the estimated interest for 2025--26
£3,750 two collect the underpayment of £750

12570 - 3480 - 3750 = tax code allowances of 5340.

But if you then deduct the extra tax code allowances of ~450 you had in your "usual" code that takes it down to 4890 (= tax code 489L)

Not a million miles from your 448L.

But as ever with tax the devil is in the detail and you can see that in your Personal Tax Account.

Hi I gave job allowances for uniform and union fees .

Thankyou for the rest of the analysis  
🙂