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Tax code in new job query

(14 Posts)
AndIamAnElf Tue 20-Sep-11 18:16:23

Hi,

My DH has started a new job, in the previous job he had a company car, in the new job he has a car allowance. So he has just got his first payslip and it has used the previous tax code and he has paid over 40% tax. Does this seem right. I have had a look at CAB and they say that the first 35,000 is taxed at 20% is that right. The pay is a lot less than expected and we are very concerned?

shineypenny Tue 20-Sep-11 18:19:43

Has he been paid by both companies within the same tax month? (i.e. between 6th of one month and 5th of the following month). If so, he could have earned enough combined to push him over 40% for one month only.

What is the tax code?

AndIamAnElf Tue 20-Sep-11 18:22:59

no it has been 6 weeks since he started. The code is k791.

Thanks

AndIamAnElf Tue 20-Sep-11 18:24:32

he is in the 40% tax band, but I thought it was only 40% of the money that was over £35000 IYSWIM

ChasingSquirrels Tue 20-Sep-11 21:55:18

The previous employer needs to inform HMRC that he no longer has a company car, it may be that they haven't done this, or it maybe that HMRC haven't processed it yet. Either way his code has still got the car on it.
He might be able to get HMRC to issue a new code if he calls, explains that he no longer has the car (and therefore should only be taxed on it for the part of the year he had it) or it may be that they won't do anything until they get the paperwork.
Either way, when it does work it's way through the system he will get a new code and as PAYE is calculated cumulatively he will pay less tax (or receive a refund of it depending on the figures) in the pay month that the new code is applied.
If the coding isn't sorted out in the 11/12 tax year then he would need to do a tax reclaim to get the tax back.

shineypenny Tue 20-Sep-11 22:53:20

A K code is used when an employee will not pay sufficient tax to cover what they owe (normally because of company car or other allowance).

The K791 code effectively adds £7910 to your dh's taxable income and deducts tax from the notional figure so, if he is in the 40% tax band anyway, it will also deduct 40% of one twelfth of the additional £7910 each month.

If he does not have the car anymore, he needs to contact HMRC and get a revised code, as stated by ChasingSquirrels

CogitoErgoSometimes Wed 21-Sep-11 07:10:21

Would echo the suggestion to write immediately to HMRC, explain the new job and change to car provision and get a new tax code. Would also strongly recommend that, even if he does all of that, he completes a self-assessment tax form at the end of the tax year (and every year after that). HMRC can be a little slow with the corrections, don't always get it right, and it pays to make sure you're all square once a year.

janinlondon Wed 21-Sep-11 11:29:01

I have just gone through this. Was wrongly given a K code. I rang the IR and explained and they have changed it this month. Just call them!

vickibee Wed 21-Sep-11 12:30:18

The new Er will use the tax code from his P45 as issued by old Er. The new Company will have to wait for HMRC write to them with a new code once they know he no longer has the car. It may be worth a phone call

Lizcat Wed 21-Sep-11 13:41:35

Actually for at least the last 18 months it is the employee's responsability to inform the HMRC of changes with regard to company cars. As Vicki said the new company will use the tax code on the P45 and once he has reported lack of car they will issue new tax code to new employer and he will get any over payment of tax back.

LittleMissWoodscommaElle Wed 21-Sep-11 13:43:40

My Mum has a nightmare over this. Whenever anyone changes their company car or gets rid of it it takes forever for the tax office to amend the tax code and she is powerless to do anything about it.

This year the employee got their notification of the change 3 weeks before she got it and legally she has to wait for the employer notification.

AndIamAnElf Wed 21-Sep-11 14:28:34

Thanks for all the replies, I will get him to make sure all the relevant paperwork has been sent.

OneOf8 Wed 21-Sep-11 14:34:25

Just to add, rather than wait for ex-employer to do the notification (as most do this at the end of tax year) complete a P46 car form - (google this and you can print one off)

Submitt this to payroll for them to submitt to HMRC at current employement.

Once tax code corrected they will rectify any over payment.

HTH

AndIamAnElf Thu 22-Sep-11 07:32:47

Thanks i will look at that.

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