tax query

[mikesnook1]

i have received a new tax code from the inland revenue, my new tax code is 258L and my old tax number was 747L, so my question is will i be paying more or less tax? thanks in advance for your help.
mike.

[factor-fiction]

More (assuming this is your only tax code). Previously the first 7470 was free from tax so you paid tax on everything above that. Now only the first 2580 is tax free. So a further £4890 is taxable. At tax rate of 20% that's an annual rate of £978 pa
Is it right? Is it because you have a state pension or other income that isn't taxed at source? Or do you owe tax from previous years?

[ChuckFickens]

A tax code of 747L would mean you can earn £7470 a year before paying tax and you'd then pay tax on anything above the £7470.

A code of 258L means you'd pay tax on anything you earn above £2580 a year.

So assuming you earn over £7470 a year you'll be paying tax on an extra £4890 per year (which will work out to approximately £978 a year more at 20% tax rate)

[Dodger666]

HMRC must be sending a few of these out at the moment. I've also had one today reducing my tax code from 419P to 400T.

If you read the "Special Note" on the back it says, or at least mine does, how much tax you have underpaid.

HMRC are renowned for making mistakes. If you think they're wrong query it.

[factor-fiction]

^With a name like Dodger, HMRC were bound to look more closely at your tax affairs :)

[Dodger666]

You could be right there factor30, they seem to take enough from me. I don't really know why, I don't remember joining the club.

[Buenchico]

A possible explanation here:
http://forums.moneysa...wthread.php?t=3172568

Chris

[factor-fiction]

That could be it, Buenchico. ESA is a more likely explanation than state pension since personal allowances are higher at age 65