Re: K income tax code


"Ronald Raygun" <no.spam@xxxxxxxxxxxxxxxxxxxxx> wrote in message
news:1Y5wh.4004$9S5.2518@xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Tim Rogers wrote:

"Ronald Raygun" <no.spam@xxxxxxxxxxxxxxxxxxxxx> wrote in message
news:1_4wh.3953$9S5.177@xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Tim Rogers wrote:

If so surely then I will be overpaying my income tax then?

Well yes, that's the idea. You should pay more tax next year than
you would have done if your next year's code were the normal 522L.
If the result is that you pay £2200 more tax, then you'll end up
even.

Well they've worked out my tax code by reducing my allowance by 10000
(22%
of £10000 is £2200). However, if I am paying some of that tax back at 40%
then I'll be paying back £2200 extra and some more as well?

Perhaps they thought that whatever error led to you owing them £2200 is
continuing, and they're trying to pre-compensate for that.

I'm not sure exactly how the K codes work. It's probably that £4640
is added onto your income and your personal allowance deleted, so
you'd be taxed as though you were earning £39640. Say £2200 at 10%,
£31800 at 22%, and £5640 at 40% (total tax £9472), instead of your
normal £5225 at 0%, £2200 at 10%, £27575 at 22% (total tax £6286),
so I guess you'd be overpaying just under £1000.

Well my wages will be down by £183 a month anyhow so I don't fancy being
down by another £83ish. I think I need to get them to spread it over more
time to avoid this. After all it took them over three years to spot the
error!!!



Don't worry. If you overpay you can get a refund.
It could be worth asking for an adjustment to your tax code which
would result in you not overpaying that much, if your other request,
to spread the repayment over 2 years is unsuccessful.

I'll get on the phone to them tomorrow.

Thanks,

Tim




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