Just received my new Tax Coding Notice from those good people at HMRC and they've deducted £800 for use of a company car.
Erm, news to me.
Anyone know what "car" would attract such a low deduction anyway? £800 = £160 at basic rate, £13 a month?
Or have HMRC just plucked a number out of the sky?
A Renault Twingo 1.2 Bizu with £1500 worth of fitted options?
Are you saying you don't (didn't) have use of a company car? If they've made a mistake, then obviously you should tell them.
One could have had use of the company car for only part of the tax year 2009-10. The charge would then be pro-rated. For example, if the normal company car charge would have been £4800 for the whole year, then £800 would represent the charge for 2 months' use.
The adjustment to your tax code would be a means of collecting extra tax due for 2009-10, and is not in respect of anticipated use during
2010-11, though I don't quite understand why they wouldn't also make such an adjustment, unless the period of availability of the car ended before 5th April 2010.
I did have a company car in my previous employment (which ended in August 2010) but my tax code during that employment reflected the fact.
Your tax code for the whole tax year 2010-11 should reflect that. That includes the code used by your new employer.
As long as they have apportioned it correctly, this will ensure that the right amount of tax is deducted. If you have the right code, the tax tables spread the tax charge out evenly over the whole year, despite the fact that you only had the benefit until August.
However, check what code your new employer has been using. If it is the one they got from your P45 from your old employer, then you have probably been paying tax as if you still had the car. Assuming your new employer uses the new tax code before the end of the current tax year, then the effect should be that you get a refund in your next pay packet. If not, you should claim a refund direct from the taxman after the end of the tax year.
If on the other hand this is your notice of coding for 2011-12, and it duplicates the charge in your tax code for 2010-11, then that's a mistake. You should ask your tax office to correct it.
My tax code from November (when I started work again) - now has been W1657L.
But I should only be taxed for the usage, yes? So, for example, say the taxable benefit was £1200 and I had that benefit until the end of August (5 months) then the taxable benefit would be 5/12 of £1200, i.e £500?
I think they used a P46(?) because I was awaiting my P45. But it's definitely W1657L.
I think you've been on an emergency tax code. I'm guessing that it has been 657L and that it's been on a W1 (week 1) basis - i.e. there should be a space between the W1 and the 657L.
An emergency tax code just gives you the basic personal allowance that eveyone gets, but nothing else. Slightly odd that it is 657L, since the personal allowance would be coded as 647L.
Week 1 basis means that they are assuming you had a job earlier in the tax year and paid tax and received the personal allowance there. So they have only been giving you an appropriate proportion of the personal allowance, on a week-by-week or month-by-month basis, not the full amount for the whole year.
It sounds like you had a gap in your employment from August to November, which would point towards a refund. The emergency code would have assumed that you got 1/12 of the personal allowance in September and October, but in fact you didn't because you weren't working - so the taxman owes you.
But if deductions have also caught up with you, that may tip the balance in the opposite direction. And if you had any other income between August and November, that would also affect the calculation, and you should declare it to the taxman.
Since the sum total of the tax you paid via your old employer and your new employer should add up to the correct amount of tax for the year, it's definitely worth checking and claiming a refund after the end of the tax year if necessary. Your old employer may have deducted too much tax, since he didn't know that you would be giving up the company car part way through the year.
The question is whether the information about the amount of tax deducted by the old employer has filtered through to the new one. If so, then you will also be due a refund (via the new employer) for the overpaid tax on the company car. If not, you will have to claim it back from the taxman. Your problem will be that your payslip won't tell you how any refund is derived (and your new employer won't know either).
Yes. You said earlier it was 800, which would suggest that the taxable benefit for the full year would have been 1920. (1920 x 5/12 = 800) The fraction 5/12 may be approximate, of course.
Apologies, I've been doing some work on my wife's tax, hers is 657L.
Mine is W1647L (no spaces).
I did some self-employed work between August and October and have registered for self-assessment. The girl on the phone didn't seem overly bothered when I informed them in October, I'm sure she said something like "you've got until July next year to inform us officially".....something along those lines!
And I had income of 6 x £65.45 JSA between October and November which, apparently, is taxable as well.
The car benefit in my previous employment was £2024 which gave me a tax code of 444L - my coding for next year is 7475 - 800 car benefit 667L.
The notes on the back of the form simply tell me that they "understand" that I have a company car provided by .
They don't make life easy, do they?
Thanks for all the guidance, much appreciated.
Yes, it's all a bit messy:
five months of employment under PAYE with a company car six weeks of self-employment, car parking and mileage allowances thrown in six weeks of JSA the rest of the tax year back in PAYE employment on a strange tax code
Happy days :-)
Just an update, after I'd prodded them, a new tax code arrived today.
"It's probably from a previous employment" was the excuse offered when I queried it. Even better, when I asked "um, should that happen?" I was told "well no but it's the system".
Amazing how "the system" always works in favour of the UK Govt innit?
BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.