New tax year, tax codes?

rG-tom · 26 Apr 2011 at 15:01

Hey,

I work for a small company and the payroll department aren't 100% sure on this, and only make changes if they receive a letter saying to do so, so I'm wondering if anyone can shed any more light,

http://thesalarycalculator.co.uk/about.php said:
Tax codes usually indicate the personal allowance by including a number which should be multiplied by 10 and have £5 added to it to make the personal allowance - e.g. the standard code 747L indicates a personal allowance of £7,475.

My payslip for this month has 647L, which is in line with last years tax codes if I am right? Should this be changed for this month? What instigates the change? It's only £20 difference, but £20 in my pocket is better than in the tax mans!

Thanks,

Tom.

Dugganator · 26 Apr 2011 at 15:04

Just checked mines on the 747L code. Hope that helps.

Ghosteh · 26 Apr 2011 at 15:09

Surely that's a £1000 difference? 647=£6,475.

I don't really understand the tax system, so I won't like, I may be completely wrong on these things

.

Morba · 26 Apr 2011 at 15:10

Mine still showing BR! Muppets.

kmufc77 · 26 Apr 2011 at 15:14

Duggan said:
Just checked mines on the 747L code. Hope that helps.

mine is 747 aswell.

PhillyDee · 26 Apr 2011 at 15:18

Yes, the tax code should have went up. If your HR/Payroll have not updated them, then its their fault, but you would probably be penalised for it!

As for BR - Get in touch with payroll and get a P35 filled out if they have not already.

Cosimo · 26 Apr 2011 at 15:19

The basic personal allowance has gone up from £6471 to £7471 from the 5th of April for tax year 2011-12.

rG-tom · 26 Apr 2011 at 15:19

Managed to get to the bottom of it: Sage doesnt change the payroll until year end has been completed, and that hasn't been done yet; the HMRC requirement is that it has to be done by 17th of May. I've been assured that the difference will show up next month.

rG-tom · 26 Apr 2011 at 15:20

simulatorman said:
The basic personal allowance has gone up from £6471 to £7471 from the 5th of April for tax year 2011-12.

I thought it was £6475 and £7475 not 1?

rG-tom · 26 Apr 2011 at 15:20

Ghosteh said:
Surely that's a £1000 difference? 647=£6,475.

I don't really understand the tax system, so I won't like, I may be completely wrong on these things .

£1000 more untaxable pay, but it only works out £20 a month difference in take home per month.

tres · 26 Apr 2011 at 15:22

PhillyDee said:
Yes, the tax code should have went up. If your HR/Payroll have not updated them, then its their fault, but you would probably be penalised for it!

As for BR - Get in touch with payroll and get a P35 filled out if they have not already.

P46 not P35!

And BR should only be used if you tick box "C" on the P46 - this is a second job

And you wouldn't get penalized - your employer would. Although I doubt they actually would, as you're paying more tax than you need to

rG-tom said:
I thought it was £6475 and £7475 not 1?

It's £7475, not £7471

PhillyDee · 26 Apr 2011 at 15:27

tres said:
P46 not P35!

Hehe. Oopsy!

Anyway, BR is also used when they either don't have a copy of your tax code, or haven't received notification from HMRC. Usually when just changing jobs.

Cosimo · 26 Apr 2011 at 15:34

rG-tom said:
I thought it was £6475 and £7475 not 1?

It is. My mistake, 6471 as in fact 647L on the P60.

tres · 26 Apr 2011 at 15:47

PhillyDee said:
Hehe. Oopsy!

Anyway, BR is also used when they either don't have a copy of your tax code, or haven't received notification from HMRC. Usually when just changing jobs.

Not quite right - a non cumulative tax code is used when they don't have a copy of your tax code - so 747L Week 1 would be the tax code used in 90% of situations

BR is used if another job exists, or for a few other reasons

shine · 26 Apr 2011 at 15:57

You should have received a letter with your new tax code a while ago - if you haven't contact the Tax Office:

http://www.hmrc.gov.uk/incometax/code-wrong.htm

daver · 26 Apr 2011 at 16:11

rG-tom said:
Managed to get to the bottom of it: Sage doesnt change the payroll until year end has been completed, and that hasn't been done yet; the HMRC requirement is that it has to be done by 17th of May. I've been assured that the difference will show up next month.

This is half true, you have to submit year end information to HMRC by then, but that's no excuse for not running your payroll right. I know for a fact you can roll forward the year end in sage without submitting it to HMRC because I did it for one of our companies as the HMRC gateway for online submission was down for a few days. We use a different payroll software at one of our other sites and its the same there, you can run payroll for the next year without finalising the previous year.

It may well be sorted out next month, but its pretty poor form by your HR department.

Basher · 26 Apr 2011 at 16:12

I seem to be getting £20 less a month now

Greebo · 26 Apr 2011 at 16:18

Balls about Sage needed to roll on the yearend. We haven't done ours yet but once I moved the date to this year, I made sure all the tax and NI bands had changed to where they should (sage sent a disc out for this) and followed the instructions from the Inland Revenue to increase all L codes by 100 and remove any week 1/month 1 status.

The only other thing to check was the odd person who had got a new totally different tax code for this financial year and input those changes as they overule the standard uplift.

Your payroll department have got it wrong. In fact, I wouldn't be surprised if that is the excuse they are using that you are paying the wrong amount of NI as well.

And on that note, depending what you earn, the extra £16.66 per month less tax you pay can be wiped out by the extra 1% NI you are paying. Only low earners have seen their take home increase, lots of people see there's going down.

tres · 26 Apr 2011 at 16:50

As what the above said - they should have moved on their payroll to the new year, and should be processing all payroll with the new rates etc - and CERTAINLY shouldn't think they have until May to do this!