Whats your tax code : Salary under £30K

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stacey_lou

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Im curious as to what people salary tax codes are who earn within the 20% salary bracket as it takes forever to get through to the tax man and need to know if its worth hanging on for.

The website says the numbers in your tax code x 10 should equal your personal allowance which in this tax year is £10,600 before you pay tax.

My tax code is 001004 which x 10 = £10,040 which is well below the £10,600 stated.

So for this the tax code should start 001060 which which ever letter follows mine being L for the Basic rate to fall within the 20%.

Also to add we have no HR at work ATM so cant really ask them

would be greatful.

Thank you
 
The standard person tax code for this year is 1060L.

For you to have a tax code of 1004L then HMRC believe you owe tax of £560 from previous years, or you have another income/pension etc which uses the remaining £560
 
Soup Dragon said:
The standard person tax code for this year is 1060L.

For you to have a tax code of 1004L then HMRC believe you owe tax of £560 from previous years, or you have another income/pension etc which uses the remaining £560
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Thank you, I pay into my pension (i am only 27) but when you pay into a pension that's nontaxable isn't it?
 
Remember it's not £560, it's tax on that £560 so worth about £130 over the year.

That amount sounds like the tax office think you have some kind of medical cover through work, it may be part of your pension.
 
catroo said:
Remember it's not £560, it's tax on that £560 so worth about £130 over the year.

That amount sounds like the tax office think you have some kind of medical cover through work, it may be part of your pension.
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I have medical cover but then why would they tax an extra £560 or my salary? when the cover is paid by mu employer at £30 PCM

This is one subject which should have been taught at school as it always confuses me
 
do you have a small part time job which is taxed via your code number or a small source of casual earnings? Does your employer pay for Bupa for you?
I would guess otherwise that there is an underpayment from an earlier year that has been coded out.
You would have received a coding notice probably in Jan this year do you still have it?
 
stacey_lou said:
I have medical cover but then why would they tax an extra £560 or my salary? when the cover is paid by mu employer at £30 PCM

This is one subject which should have been taught at school as it always confuses me
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30 x 12 = 360. Does your employer pay for anything else at around £200 (to make up 560) A personal subscription perhaps, dental cover etc.

You are taxable on benefits your employer provides in this case medical insurance and the tax is collected by restricting your code number ie restricting the personal allowance.

Your code number sounds about right provided you can account for the other £200 of benefits. (or that could be an underpayment if you got medical insurance in an earlier year that wasn't coded out at the correct time therefore resulting in insufficient tax paid.
 
Phone the tax man. They are usually very helpful on basic queries like this, although it can take a long time to get through to a human being. If there is an error, they will be able to sort it out for you.
 
stacey_lou said:
I have medical cover but then why would they tax an extra £560 or my salary? when the cover is paid by mu employer at £30 PCM

This is one subject which should have been taught at school as it always confuses me
Click to expand...

If your employer provides you with benefits at their cost then they will also prepare a P11d statement at the end of the year detailing the benefits you have received and their cost. A copy of this should be given to you and a copy is sent to HMRC, you are then made liable for the tax on this benefit as though you had received it as salary.

So effectively benefits provided by your employer cost you 20% of their value each year
 
Hi, friendly HR person here :-) if your company pay medical cover for you it is classed as a benefit, (like a car for example) and is part of your taxable income. As the tax on a £360 benefit would be £72 I would think that they may of just cottoned on to you getting this and are collecting back tax. You should have received a coding notice from HMRC explaining how your tax code is worked out, if not contact them and ask for one. You should also of received a P11D from your employer which shows the value of your taxable benefits, a copy of which they have to send to HMRC so that they know what you have had and by what amount to alter your tax code to recover the tax.
SORRY, just seen Lizze has answered same while I was typing :-)
 
Definitely persevere with calling them. It took me about 2 weeks to get through earlier this year, but the person was really helpful when I got through. They had halved my personal allowance and the woman basically admitted she didn't know why, and fixed it for me 😊
 
You don't lost the £560 . It's 20% of that.

For example:

I earn £120.
My tax allowance is £100 and I am taxed 20% on everything above this.
20% of 20 is £4.

If you earn £15,000
Your tax code is 10,600
My tax code is 10600500

You are taxed 20% on the difference: 15,000(salary) -10,600 (tax threshold)= 4400.
20% of 4400= £880 ( the amount of tax you pay)

If your tax code falls to 10,04.0
You are taxed at 20% on the differnce : 15,000(salary)-10, 040 (tax threshold)=4960
20% of 4960= £992 (the amount of tax you pay)

So although your tax code has fallen by £540 you are only paying 20% on this value, not the value itself. So if you work out

20% of 540 = £108 over 12 months = paying tax of £9 a month.

The government probably think you owe them £108 from last year.
 
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