I am just sorting my Sage instant accounts out and entering details for this financial year.
The letter I got from HMRC in january says my taxcode for 2010/11 should now be BR
Most of my income is from dividends and I do a gross PAYE income of around £15k.
Does this tax code mean HMRC wants me to pay 20% Basic rate of all income for 2010/11 without any personal allowance taken into consderation or am i missing something here?
This question is based on something I read on ir35calc below
Tax code BR
Stands for “Basic Rate” and indicates that all of your income is to be subjected to the basic rate of tax at the current rate. You will therefore receive no personal allowances but you will not be subjected to higher rates of tax.
A BR tax code is often issued to a consultant who sets up his own limited company, having just left a previous employment.
This is because HMRC may believe that the new company is a second source of income prior to your form P45 filtering through the system, indicating that you have left the previous employment. As soon as HMRC realise that the new limited company is your only source of income, they will usually issue an appropriate “L” tax code as above. A letter from your accountant to the Payroll Inspector for the new limited company can often speed up this process.
The letter I got from HMRC in january says my taxcode for 2010/11 should now be BR
Most of my income is from dividends and I do a gross PAYE income of around £15k.
Does this tax code mean HMRC wants me to pay 20% Basic rate of all income for 2010/11 without any personal allowance taken into consderation or am i missing something here?
This question is based on something I read on ir35calc below
Tax code BR
Stands for “Basic Rate” and indicates that all of your income is to be subjected to the basic rate of tax at the current rate. You will therefore receive no personal allowances but you will not be subjected to higher rates of tax.
A BR tax code is often issued to a consultant who sets up his own limited company, having just left a previous employment.
This is because HMRC may believe that the new company is a second source of income prior to your form P45 filtering through the system, indicating that you have left the previous employment. As soon as HMRC realise that the new limited company is your only source of income, they will usually issue an appropriate “L” tax code as above. A letter from your accountant to the Payroll Inspector for the new limited company can often speed up this process.
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