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Tax code without notification
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Got my pay slip today to find that my tax code had changed from 781L to K16, resulting in an extra payment of nearly £300 per month. I have attempted to contact the tax office with no success probably due to the volume of April calls. Is this something they should have notified me about? There has been no change in my circumstances, anyone experienced in employment tax issues had anything similar. Don't know what the K16 code means.
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http://www.payroll-he...oes-my-tax-code-mean/
There is quite a good explanation on the above link, just scroll down to the relevant section.
There is quite a good explanation on the above link, just scroll down to the relevant section.
This is the only reference I can find to K16.
http://www1.landregis...oad/documents/k16.pdf
http://www1.landregis...oad/documents/k16.pdf
Looks like you tax affairs are not in a good place, but better to discuss with HMRC to discover the reason.
extract from http://www.hmrc.gov.uk/helpsheets/e12.pdf
K codes
Tax codes starting with a K have a regulatory limit of 50 per cent of an employee’s gross pay in the pay period. This limit restricts
the amount of tax that is taken from the employee’s pay to make sure that they retain a certain amount of take home pay.
K Codes
Normally, the employee will be allocated their personal allowances by HMRC, and this will result in the issue of a suffix tax code, described above. This will allow the employee to enjoy a free pay amount every time they are paid, therefore, they pay tax on less money than they actually earn.
The simple explanation of a K code is that HMRC have allocated personal allowances to the employee, however, the adjustments they have made have resulted in negative allowances. For example, an employee is entitled to the standard personal allowance but had a company car in the previous tax year with a taxable benefit in the sum of £8,000. The tax code is calculated by HMRC as follows:
•Add Personal Allowances £7,475.00
•Less taxable benefits £8,000.00 equals
•Resultant allowances -£525.00
The effect of this calculation is that the person is due to pay tax on more money than their personal allowances. The -£525.00 will be rounded down to a tax number of 51 and a prefix K placed in front, giving tax code K51. This is then converted to a monetary value in the same way as above, i.e. K51 becomes £519. This monetary value represents the annual amount that must be added to taxable pay. For example
An employee has a tax code K51. To calculate what this means in terms of the amount that has to be added to taxable pay:
•Remove the suffix letter – i.e. K51 tax code becomes 51
•Add a 9 to the end – i.e. 51 becomes 519
•Convert to a cash value – i.e. 519 becomes £519.00
£519 represents the amount of pay is added to taxable pay over the course of the tax year. This is called ‘additional pay.
As with a suffix code, the employee is not taxed on the whole of the additional pay one go. It is allowed against the wage or salary in equal instalments throughout the tax year. For example, using the above tax code and assuming that the employee is monthly paid, the employee will be taxed on an additional £43.25 per month (£519.00 / 12). So, if earnings in the month were £1,000.00, the employee would pay tax on £1,043.25.
extract from http://www.hmrc.gov.uk/helpsheets/e12.pdf
K codes
Tax codes starting with a K have a regulatory limit of 50 per cent of an employee’s gross pay in the pay period. This limit restricts
the amount of tax that is taken from the employee’s pay to make sure that they retain a certain amount of take home pay.
K Codes
Normally, the employee will be allocated their personal allowances by HMRC, and this will result in the issue of a suffix tax code, described above. This will allow the employee to enjoy a free pay amount every time they are paid, therefore, they pay tax on less money than they actually earn.
The simple explanation of a K code is that HMRC have allocated personal allowances to the employee, however, the adjustments they have made have resulted in negative allowances. For example, an employee is entitled to the standard personal allowance but had a company car in the previous tax year with a taxable benefit in the sum of £8,000. The tax code is calculated by HMRC as follows:
•Add Personal Allowances £7,475.00
•Less taxable benefits £8,000.00 equals
•Resultant allowances -£525.00
The effect of this calculation is that the person is due to pay tax on more money than their personal allowances. The -£525.00 will be rounded down to a tax number of 51 and a prefix K placed in front, giving tax code K51. This is then converted to a monetary value in the same way as above, i.e. K51 becomes £519. This monetary value represents the annual amount that must be added to taxable pay. For example
An employee has a tax code K51. To calculate what this means in terms of the amount that has to be added to taxable pay:
•Remove the suffix letter – i.e. K51 tax code becomes 51
•Add a 9 to the end – i.e. 51 becomes 519
•Convert to a cash value – i.e. 519 becomes £519.00
£519 represents the amount of pay is added to taxable pay over the course of the tax year. This is called ‘additional pay.
As with a suffix code, the employee is not taxed on the whole of the additional pay one go. It is allowed against the wage or salary in equal instalments throughout the tax year. For example, using the above tax code and assuming that the employee is monthly paid, the employee will be taxed on an additional £43.25 per month (£519.00 / 12). So, if earnings in the month were £1,000.00, the employee would pay tax on £1,043.25.
K codes are used when you owe HMRC money, K16 would mean you are only able to earn £160 a year tax free. This could be for numerous reasons but it is usually from them checking over your tax affairs for the past few years and then making any adjustments needed.
All are computer checked each year but some are audited by so called Humans to check the computer is doing its job!!
All are computer checked each year but some are audited by so called Humans to check the computer is doing its job!!
If you've genuinely no change in circumstances and are regular PAYE then it sounds like a horrible mistake.
Their lines will be re hot at the moment but if it were me I'd ask my employer if I can take a longer lunch break or a half day off to go to the Tax Office. Once there sit and wait for as long as it takes to get it sorted out promptly.
Their lines will be re hot at the moment but if it were me I'd ask my employer if I can take a longer lunch break or a half day off to go to the Tax Office. Once there sit and wait for as long as it takes to get it sorted out promptly.
You say there has been no change in circumstances- but are you sur eyou haven't been underpaying tax previously? Did you have any 'benefits in kind' such as a company car. Do/did you have another source of income (eg pension) which wasn't taxed at source?
You can call them to sort it out but the call may be expensive. When i had to make a call recently I was hanging on for an hour and then they asked me to check something with my employer first and then ring back (with another long wait) - which led to a phone bill of around £4
You can call them to sort it out but the call may be expensive. When i had to make a call recently I was hanging on for an hour and then they asked me to check something with my employer first and then ring back (with another long wait) - which led to a phone bill of around £4
I agree it should be queried asap, ojread2- although if it is an error she'd probably have to wait until at least the end of next month (May) whether she writes, phones or goes into the tax office. If dennilson does ring he should set aside maybe an hour to do so and is best ringing outside peak hours
Factor 30 I made the phone call 0830hrs and only waited 30 minutes. Spoke to one of the tax officers. Apparently their computer has confused a minor pension payment: £17 per month with my salary. Their updated records showed that this long standing payment was actually my salary, 17 quid per month, and in fact my salary was this pension payment. You couldn't write it. He stated that things like this do happen occasionally which leads to the calculations being dip sampled by "human" auditors. He was apologetic and corrected the fault. Many thanks for the replies. Almost impossible to get phone advice.
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