Tax Codes

Fusion · 4 Jan 2019 at 20:30

I have noticed that my tax code is 1092L rather than the typical 1185L. It's been this way since April- before that, it was 1150L.

I'll speak to my firm's Payroll department Monday, but any ideas why it's wrong? I have always contributed to the pension scheme and haven't changed the amount. Is it possible they've added on some of benefit (like a health scheme), by mistake? I don't have a company car, fuel card or anything like that.

Is it too early to feel warm and fuzzy inside over the possibility of claiming some tax back from HMRC?

Cheers

Scuzi · 4 Jan 2019 at 20:36

Have you exceeded £100k and therefore reduced your personal allowance? For every £2 earned over £100k you lose £1 of personal allowance.

DJ85 · 4 Jan 2019 at 20:36

I’m not to sure does it maybe mean your tax free personal allowance has went down to £1092 from £1185?
My tax code has changed so much lately I’ve just been told I’m changed to S839LM1 no idea :confused:

Fusion · 4 Jan 2019 at 20:41

Scuzi said:
Have you exceeded £100k and therefore reduced your personal allowance?

I wish!

koooowweeee · 4 Jan 2019 at 20:50

David Flett said:
I’m not to sure does it maybe mean your tax free personal allowance has went down to £1092 from £1185?
My tax code has changed so much lately I’ve just been told I’m changed to S839LM1 no idea

Would need another zero on the end,no ?

DarkHorizon472 · 4 Jan 2019 at 20:56

HRMC normally send a letter to advise of tax code changes with how the code was calculated.

Skynet5 · 4 Jan 2019 at 21:12

Could be you underpaid last year.. Payroll mistake maybe? Taxable benefits. .?

They'll adjust it as necessary. Isn't too much so I wouldn't worry about it. You can phone the tax office or look at your pay slips... Perhaps the p60 will give you a good summary?

Fusion · 4 Jan 2019 at 21:22

Don't recall any letters mentioning a code change. Hopefully a few hundred quid to come back...

mollymoo · 4 Jan 2019 at 21:37

Your payroll dept will have had a tax code notice and so should you, The difference in codes cant be a mistake as it is very different. The best thing to do is ring HMRC and see what they say.
If it is correct then normally it is because of an underpayment of tax but if you haven't had another source of income then yes you may well have been incorrectly taxed. I have seen a lot of wrong tax codes so it is always worth checking.

khrall · 4 Jan 2019 at 22:06

Do you earn over 50k a year and claim child benefit?

Fusion · 5 Jan 2019 at 08:19

khrall said:
Do you earn over 50k a year and claim child benefit?

Nope.

Vern1961 · 5 Jan 2019 at 08:28

There are all sorts of reasons why your tax code is less than the default, most usually due to benefits in kind.

In my case, I retired at the end of October and almost immediately had a letter from the tax office that my allowance would be reducing as there was a backlog in the PAYE from my employer, presumably due to levelling the 40% deductions. Not really what you need moving onto a fixed occupational pension income! In addition there was a further benefit in kind paid as a one off to cover travel facility provision for the rest of my life, as opposed to an ongoing annual arrangement, which has also been deducted by the tax office off this years allowance. A nice gesture, but the timing sucks as I've dropped from £11k to around £6k personal allowance.

As an aside, I found it very difficult to get hold of the tax people to discuss the issues. Phone: End up on indefinite hold with national rate call charge ticking by. Online: Security paranoia with the registration process asking increasingly obscure questions about your fiscal history and if you get one answer slightly incorrect, boots you out. In the end, I had to resort to snail mail but even then I had to hunt around for the correct address as it all seems to be centralised now (my tax always used to be done from Bootle).

lolism · 5 Jan 2019 at 10:16

As mentioned it can be many reasons. Benefits in kind being the main one. Do you have private medical, receive a loan at reduced rate of interest, buy old office equipment or company pay off the remainder of a cycle to work scheme?

1092L screams private medical, though if your company provided you with this you would have the documentation from the provider. Best course of action? Ring HMRC. It'll take a while to get through, best bets are 9AM, as close to 1PM as possible or nearing 5PM or be prepared to wait.

Fusion · 5 Jan 2019 at 11:40

I haven’t signed up for any benefits. I think you could be right in that I’ve been signed up for private medical, but I haven’t had any documentation about it.

Richie · 5 Jan 2019 at 12:21

David Flett said:
I’m not to sure does it maybe mean your tax free personal allowance has went down to £1092 from £1185?
My tax code has changed so much lately I’ve just been told I’m changed to S839LM1 no idea

S- Scottish Tax Rate
839L - £8,390 tax free allowance
M1 - Month 1 - Means that every month, they will take your gross, multiply by 12 and assume this is your annual gross then calculate the tax from there.

I was on M1 for 8 months last year (2017/2018) and ended up with a £650 tax refund.... They have, again, stuck me on an M1 code from about June 2018 so I am expecting similar at the end of this tax year as my Tax Allowance is tiny now (427L) making my Income Tax percentage rather large

Skynet5 · 5 Jan 2019 at 12:41

Fusion said:
Don't recall any letters mentioning a code change. Hopefully a few hundred quid to come back...

Perhaps. Do you do a tax return? Tax is real-time now, well month to month...so unless there is a mistake it basically smooths out over and under adjustments from salary.

Skynet5 · 5 Jan 2019 at 12:42

Fusion said:
I haven’t signed up for any benefits. I think you could be right in that I’ve been signed up for private medical, but I haven’t had any documentation about it.

It has to say that on your payslip. Checked?

Fusion · 5 Jan 2019 at 12:47

lnoton said:
It has to say that on your payslip. Checked?

Yep, just has Income Tax, NI, Pension and Student Loan. I don't do a tax return.

Jonnybmac · 5 Jan 2019 at 12:59

I earn 24k a year and my tax code is now 788L X, the L being changed from 7882 which is my tax-free allowance, and the X states it will be reviewed in April.

Apparently I ow £103 tax from earlier this year, so they've took £518 off to collect it even though 20% of 518 is £103.60.

They've also calculated that the estimated tax I will owe this year is an additional £200.40 so They've made adjustments to reduce my tax-free allowance by a further £3450. THe note states

"Due to an in year adjustment to your tax code(s) we trhink that you will owe HMRC £200.40. SO that you pay the right tax for the year, we have included an adjustment to reduce your tax-free allowance by £3450 to collect £200.40 tax in equal installments from now on by increasing the tax deducted from your wage, salary or pension so that the £200.40 is paid by 5 April 2019. This is in addition to the tax you owe from earlier this year."

Not sure why I owe £300 tax to be honest considering my wage has only changed by £600 a year switching jobs, and also unsure how I take a £3450 drop unless they've done it to collect the money from the last 4 months but then £3450/12*4*0.2 = £230.

DJ85 · 5 Jan 2019 at 13:06

Richie said:
S- Scottish Tax Rate
839L - £8,390 tax free allowance
M1 - Month 1 - Means that every month, they will take your gross, multiply by 12 and assume this is your annual gross then calculate the tax from there.

I was on M1 for 8 months last year (2017/2018) and ended up with a £650 tax refund.... They have, again, stuck me on an M1 code from about June 2018 so I am expecting similar at the end of this tax year as my Tax Allowance is tiny now (427L) making my Income Tax percentage rather large

Interesting!

I have just started a new job and I have been on a basic salary for the last 2 months due to training, but now I’m going to start getting 10-15 day rates on top of this so maybe I’ll have to make sure it gets changed so I don’t get a big tax bill! I’ve only ever been lucky once in my 10 years of work with a £750 tax refund!

I also claimed travel allowance from a company called RIFT this dropped my allowance a fair bit once I got the money back.