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Negative Tax Code
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NameWithheld
Posts: 147 Forumite

I have just received a negative tax code for the coming year, K371. Never had a negative code before. How do I work out how much tax should be deducted, i.e. how much income should be taxed at basic rate.
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NameWithheld said:I have just received a negative tax code for the coming year, K371. Never had a negative code before. How do I work out how much tax should be deducted, i.e. how much income should be taxed at basic rate.
Your issue is that the first £3,719 of that is being used by your negative tax code allowances so only £33,981 of your actual pay or pension is going to have basic rate tax deducted. The other £3,719 is basic rate tax deducted of income you haven't been "paid" as such (by your employer/pension payer).1 -
Works in the same way with PAYE as a normal tax code except that instead of deducting from your taxable income the figure is added to it. For example code 1257L you deduct 12579 from taxable income, with K371 you add 3719 to taxable income.2
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Thanks. Prior to starting this thread I had put the numbers in a spreadsheet, and you comments confirmed that I had done it correctly0
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