tax code change at the end of year?

coral

Hi,

Our pay period runs from the 21st - 20th. My tax code changes on 6th April as i've been paying back an overpayment but I am just trying to work out whether i'll have paid it all back. Will my employer tax the 21st March - 20th April at my old tax code or split it between the this years and next years?

Thanks!

System

Your employer has to use the code from 6th April. The pay you receive on 20th March is the last (12th) pay of the tax year and you should have repaid all monies due to the tax office if your employer has operated your tax code correctly.

coral

thanks! well the tax code was only issued in July and been operated on an "M1" basis all year, so i guess its the April - May - June time when I only paid tax at the normal rate which has caused all the money not to be repaid.

Not to worry i'm sure I can send a cheque or something was just wondering how it got worked out.

System

If it's been operated on an M1 basis then you might not have repaid all the underpaymen. Don't worry about that though, HMRC will adjust your code and collect whatevers left that way and no interest is charged by them.

It is not "moneysaving" to pay them upfront if they are willing to collect it via your taxcode. If you have the money available then put it in a savings account and make some interest on it.

Newly_retired

[It is not "moneysaving" to pay them upfront if they are willing to collect it via your taxcode. If you have the money available then put it in a savings account and make some interest on it.[/quote]

Fine, but given the abolition of the 10% band, might she be better off paying up now?

jem16

Newly_retired wrote: »

Fine, but given the abolition of the 10% band, might she be better off paying up now?

It won't make any difference. If £50 is owed the tax code will be adjusted to collect £50 regardless of whether you pay tax at 10%, 22% or 40%.