40% Tax relief

donnalou

Hi There,

I'd be really grateful for any help here.

My Current tax code is 1121L It's high because I get 22% Tax relief on my business miles. This year my tax code was changed rather than getting a refund.What I would like to know how much do I need to earn before I can get 40 % tax relief.

Is it £34,600 +£5220 or £11210 or just over £34,600
I'm getting a bit confused by the whole thing. I think my annual income will be around £35,500 this year.

Thanks in advance

Donna

fengirl_2

It would be £34601 plus 11210 - 11210 being your tax free allowance. This would give you relief at 40% on £1.

donnalou

Thanks Fengirl,

This is what confuses me say my annual salary is £35,500 but as my tax code is 1121
I earn 35,500 + 1121 = £46710 before I pay 40 % tax

If my tax code is 522 I can earn £35,500+521 =£40170
Plus I can get 40% tax relief which means a cheque for about £2800 depending on my miles. Would I not be better off this way?

Thanks Again

Donna

GARDINER

As long as the mileage allowance has been correctly calculated for your code number the end result will be exactly the same either way.