Differential tax codes and tax rate

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Surajit
Surajit Posts: 1 Newbie
in Cutting tax
Have come to UK recently and July was the first month of salary credit. Taxed @ 13% with tax code 1185L. However for the month of Aug, taxed @35% with tax code K239 M1.

Please clarify - 1) Why this differential tax rate and tax code and what is the difference between the two?
2) What would be the tax code going forward for the rest of the Financial Year and what rate?

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  • chrisbur
    chrisbur Posts: 4,053 Forumite
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    Surajit wrote: »
    Have come to UK recently and July was the first month of salary credit. Taxed @ 13% with tax code 1185L. However for the month of Aug, taxed @35% with tax code K239 M1.

    Please clarify - 1) Why this differential tax rate and tax code and what is the difference between the two?
    2) What would be the tax code going forward for the rest of the Financial Year and what rate?

    Only HMRC can answer your questions on this. A K code is usually used when someone has a source of taxable income but tax cannot be deducted.
    Have you had a tax code notification for this K code?
    If so what were the details.
  • polymaff
    polymaff Posts: 3,904 Forumite
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    edited 13 August 2018 at 6:34PM
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    Surajit wrote: »
    Have come to UK recently and July was the first month of salary credit. Taxed @ 13% with tax code 1185L. However for the month of Aug, taxed @35% with tax code K239 M1.

    Please clarify - 1) Why this differential tax rate and tax code and what is the difference between the two?
    2) What would be the tax code going forward for the rest of the Financial Year and what rate?

    There's no such thing as a tax differential rate. Fractions of your income are taxed at different, but fixed, rates. When your code was 1185, 11850/12 of your monthly income was taxed at 0%. In the second month £-2390/12 was taxed at 0% - i.e. you lost all your 0% allowance and were forced to pay non-zero tax on a virtual £2390/12 of income.

    Looks like HMRC are learning more about you :)
  • 00ec25
    00ec25 Posts: 9,123 Forumite
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    it is obvious you need to learn how the UK tax system works

    you have "paid" 13% because you started work part way through the tax year and therefore had (a lot) of tax free amount available against your first pay

    HMRC have now come into some other info about you which means they have changed your code to a K code

    learn how the tax system works by reading lots of webpages:
    https://www.litrg.org.uk/tax-guides/tax-basics
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