PAYE Coding Notice tax code lower than expected

[mudskipper]

Spotted this today.

[LisaContractorUmbrella]

Unless your circumstances change it is unlikely that your tax code will change significantly. The only major alteration this year is for anyone earning over £100,000 per year:

From the 2010-11 tax year the Personal Allowance reduces where the income is above £100, 000 – by £1 for every £2 of income above the £100,000 limit. This reduction applies irrespective of age.

[JonSmile]

my code was well messed up

Was sent a coding telling me I was still working for a company I left 2 years ago and my mew tax code would be
12T

Just wonderful..

Still Colin at the tax office has (still awaiting the proof) fixed it for me.

[Peoplesoft bloke]

I got a letter the other day giving me a coding of D0 - looked it up and it means no personal allowance. So I'll ignore it anyway - they'll get their money through SA at the end of the year anyway.

But might be a question for accountants on the board - can we just ignore a PAYE coding notice if the correct tax will be calculated at Self Assessment time anyway?

D0 is usually issued if you have another job (or HMRC thinks you do) - or more recently where they think you will hit the 100k threshold where you lose personal allowance. As for ignoring the code - dunno sorry.

[xoggoth]

Seen this??? Huge number of tax code cockups.

http://www.dailymail.co.uk/news/arti...oup-warns.html

[thunderlizard]

A couple of years ago I got I think 4 tax codes in 1 year. I just sent them to SJD and eventually they asked HMRC what was going on and they stopped after that. Apparently they are having IT difficulties and issuing 25m coding notices this year which is double what they normally do.

[CarterUK]

I got a letter the other day giving me a coding of D0 - looked it up and it means no personal allowance. So I'll ignore it anyway - they'll get their money through SA at the end of the year anyway.

But might be a question for accountants on the board - can we just ignore a PAYE coding notice if the correct tax will be calculated at Self Assessment time anyway?

[lje]

When you fill in your tax return you can tick a box to stop them adjusting your tax code if you like. Bit late right now but could be handy in the future.

[sweetandsour]

I get a constant stream of revised PAYE coding notices from HMRC. I ignore them all.

The PAYE codes are for permies so that they don't have to do a separate tax return at the end of the year. The vast majority of my income does not get paid via PAYE so I don't think that these apply to me or to you if you are a contractor outside IR35.

[xoggoth]

Seems late but code often seems to be based initially on P11D these days as if none of the expense claims were valid. Have you done your tax return? It may change before you actually have to apply this code. If PAYE is done quarterly you have until July.

If your expenses are valid, have been stated as so in your tax return and you have not received a new tax code by nearer that time, get on to them.

One would imagine also that any real BIK would be based on the last tax return. Not so, once in they are there until you specifically inform them they no longer apply. Little more than fraud as some who know little about these things will carry on overpaying.

PS On following comment, seem to recall we did this topic before. I said you only had a legal requirement to pay right amount of tax and could ignore an incorrect code but think somebody corrected me on that.

[SuperZ]

Do those running Limited Co's and claiming a decent amount of expenses find that your tax code changes? I've only been running the limited for 2.5 years and my previous tax codes were the same as usual (single person under 65 standard tax code). For year 2010-11 however I have just been notified that my tax code will be 212L (ha ha ha). I guess tax man will be rogering me a little more this year, unless I drop my already minimum PAYE salary down to say £3000.

Does this happen often, or have SJD (or me) made a mistake on the tax return for previous year? I have just sent off a letter to HMRC asking them to detail how the £4346 reduction (due to supposed employer benefits) in my £6475 tax allowance has been calculated.

All expenses claimed have been solely for the purpose of working for the company (accommodation, food etc)