Tax Codes.

[Padders 2,870]

Any of you smart guys help me, I haven't a clue.

My tax code has gone from K 104... to 35 L...

Do I pay more or less tax.

[terry1956 10]

Hi Padders, go to the Government website at https://www.gov.uk/employee-tax-codes/letters

It will explain what the code letters mean in more detail.

 

From your previous code the letter K is used in an employee’s tax code when deductions due for company benefits, state pension or tax owed from previous years are greater than their Personal Allowance.

Multiply the number in their tax code by 10 to show how much should be added to their taxable income before deductions are calculated.

Example An employee with tax code K475 and a salary of £27,000 has taxable income of £31,750 (£27,000 plus £4,750).

 

For your new 'L' code, this is basic rate, higher rate or additional rate, it all depends of the amount you earn, i.e. L35 means if you are a basic rate taxpayer you will be allowed to earn £350 per year without paying any income tax, pretty low compared to £12,500 for the average taxpayer so can only assume you  have a lot of company benefits! car, fuel etc.

 

Cheers Terry

[Padders 2,870]

6 minutes ago, terry1956 said:

Hi Padders, go to the Government website at https://www.gov.uk/employee-tax-codes/letters

It will explain what the code letters mean in more detail.

 

From your previous code the letter K is used in an employee’s tax code when deductions due for company benefits, state pension or tax owed from previous years are greater than their Personal Allowance.

Multiply the number in their tax code by 10 to show how much should be added to their taxable income before deductions are calculated.

Example An employee with tax code K475 and a salary of £27,000 has taxable income of £31,750 (£27,000 plus £4,750).

 

For your new 'L' code, this is basic rate, higher rate or additional rate, it all depends of the amount you earn, i.e. L35 means if you are a basic rate taxpayer you will be allowed to earn £350 per year without paying any income tax, pretty low compared to £12,500 for the average taxpayer so can only assume you  have a lot of company benefits! car, fuel etc.

 

Cheers Terry

Thanks for your time Terry..

Came this morning, loads of gobbledegook , I can't make end or tail of it.

It's like trying to crack the enigma code, think I will take it to Bletchley Park..

Why don't they just put a note at the end... ( this means you will pay more/less tax next year).

[DeZeus 11]

More luck with you cracking your codes:

 

You would pay more tax than last year, this year.

 

1040-350 =?£(690)

 

all tax = tax is paid on above £350/y salary

 

 

 

[Padders 2,870]

17 minutes ago, DeZeus said:

More luck with you cracking your codes:

 

You would pay more tax than last year, this year.

 

1040-350 =?£(690)

 

all tax = tax is paid on above £350/y salary

 

 

 

Thanks DeZeus..

Thought I would be paying more, sods law isn't it... its never less.. will have to check my income in April , and work it out from there.

[willman 10]

youll be paying less tax - although not always perfectly accurate i always interpret K code as tax from the first pound you earn. everything else allows you to earn bit before tax.

So you can earn 350£ before being taxed on it,so you save 20% of £350. 

 

A K tax code is when you owe more tax than a personal allowance- i.e company car decparations,unpiad tax etc.

K104 would mean you owe 1040£ more than the current tax allowances.

 

"The letter K is used in an employee’s tax code when deductions due for company benefits, state pension or tax owed from previous years are greater than their Personal Allowance."

 

 

Edited November 13, 2019 by willman

[Padders 2,870]

20 minutes ago, willman said:

youll be paying less tax - although not always perfectly accurate i always interpret K code as tax from the first pound you earn. everything else allows you to earn bit before tax.

So you can earn 350£ before being taxed on it,so you save 20% of £350. 

 

A K tax code is when you owe more tax than a personal allowance- i.e company car decparations,unpiad tax etc.

K104 would mean you owe 1040£ more than the current tax allowances.

 

"The letter K is used in an employee’s tax code when deductions due for company benefits, state pension or tax owed from previous years are greater than their Personal Allowance."

 

 

Thanks for that Willman..I do owe them £357-60p. which is less than last year, think its unpaid tax on bank interest.

[Guest]

You can create an account on the gov.uk tax site and it'll tell you all about your tax, how much you owe, what you've been paid etc etc.

[Padders 2,870]

1 hour ago, probedb said:

You can create an account on the gov.uk tax site and it'll tell you all about your tax, how much you owe, what you've been paid etc etc.

Cheers Prob, bit too complicated for me.. just wondered why it had changed from a K104  to a 35L.