Tax code?????

[Flowersandpineapples]

Does anyone understand what the tax code 887L means? I'm paying what feels like a huge amount of tax and I can't understand why

It means your tax-free allowance is 8870 before you start paying tax. I’m assuming you have another job/source of income? If not, that’s probably not right.

I don't have another job. I will get on to HR- thank you!

Just to add, the current tax-free allowance is £12,500 denoted by a code 1250L. If you have one job, then it’s very likely that this should be your code.

Cross- posted, in that case call HMRC to see what’s going on. It could be that a portion of your Tax-free allowance isn’t still assigned to a previous employer. It should be quick to sort, they’ll let your current employer know and they’ll also be able to advise of any refunds due (and it sounds like you will be for sure).

Sorry, should read - is* assigned to a previous employer

Thank you that's good to know. I've checked my previous payslips online and it looks like this has been going on for more than a year. I'm not sure why?!

Do you have e a company car/private health insurance etc?

It’s not HR you need. You need to speak to HMRC.

The tax code 887L represents the personal tax allowance allocated against your employment income. It's likely the difference between the usual personal allowance(£12,500) and the tax code amount (which provided £8875) has been utilised against other income such as benefits in kind, or rental income and other untaxed income.

You are therefore paying more tax but that should be because you are getting other income in addition to your salary.
If this is not the case you need to contact HMRC to get this corrected

Could be a nice refund due then! My best guess was that somehow your P45 wasn’t processed properly and your full allowance is split across two employers. It’s strange HMRC haven’t picked this up by now if it’s been longer than a year. They’re generally very good on the phone so should be fairly painless.

You can check all this on the HMRC website now and save yourself hours on the phone. I did it earlier this year and discovered I was still paying tax on a company car I'd obviously given back when I left that job I'd left months earlier - but it was really easy to let them know it was wrong via the website and I got my overpaid tax back really quickly.

You can also register online for a personal tax account with HMRC and you can then see when any changes were applied. Best to call them as well. Open till 8pm weekdays.

If you're not in receipt of benefits in kind (car, private healthcare, etc) from your employer of around £3k then the code is likely wrong.

Sign up on HMRC's website for your own personal tax account and you'll be able to see the coding notices which will show what they think you're going to be earning for the year.

If it's wrong you call them and tell them and they'll correct it.

Lots of cross posts. Great minds think alike! If you're going to call them do it in the evening. It's much quieter than in the day.