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I started a new job. My P45 gave a code of 1252L. After a month the Tax people wrote and said it's now 773T. That makes sense as £7730 left of my tax free element. Latest pay check divided by 7730 by 12 and so first £600 odd was tax free. But there are only 5 months left, so at this rate I won't use all of allowance by the end of the year. Or does it auto-correct? Or do I need to wait until April to claim the outstanding amount?
Thanks..
If you log onto your online tax account there will be an explanation of what they've done. If that doesn't make sense then phone them up and they'll correct it if necessary.
I think T may be the emergency tax code? Make sure your new employer gets a copy of your P45 so they can tell HMRC, then HMRC should tell them the correct tax code to use.
HR and payroll departments are rubbish at this, as they assume everyone knows so never check it's been done, and just tell you to talk to HMRC, who will explain this all to you after an hour on hold.
I think....
773T came from the tax people. I was a company director and paid dividends (but not that much recently) along with minimal paye so that may muddy things. I'll give them a call.
As above check your online account for a coding notice.
Did you give your P45 to your new employer and have they processed it (do your earnings from previous job show on new payslip - admittedly not all payroll systems show this ‘in this employement/in previous employment’ ytd totals). Sounds possible that your p45 hasn’t been processed.
I had a zero allowance tax code at the beginning of the year, i just went on to the tax account and update my predicted taxable earnings and they assigned the correct tax code by my next months pay and was refunded the overpayments in my pay packet.
There’s another bit to the code - either a C or M1 (monthly) suffix. C means it’s cumulative so your payroll software should 'self correct' over the remaining months. M1 means each month is treated in isolation. So 1200L M1 would mean each month a £1000 allowance applies, but an unused part isn’t carried forward.
Notifications, including P45s are all done online - the p45 should have been submitted automatically when you were taken off the previous payroll. Your new payroll will already have notified HMRC that you are there so the code *should* be correct. Although directorship/dividends might complicate that.
Most times I’ve called them (pre-covid) they’ve been helpful, although occasionally you seem to got someone having a bad day. Also, as above, the website isn’t bad once you have a Gateway log-in.
HR and payroll departments are rubbish at this
True, but I think RTI submission means codes aren’t updated by HR/payroll on the payroll system now but come from HMRC.
Herself says your notice of coding letter should explain what's going on. You may be having dividends tax collected early is her educated guess.
I wouldn't worry too much, this time of year I get a letter every few months telling me mines changed as my income fluctuates. Just as I get used to binning them they send a cheque for the refunded amount from last year! Nice little bonus in the runup to Christmas.
Had to contact HMRC the other day, very similar issue.
If you have an online account with them log on and do the online chat thing. Very helpful and it tells you the place in the queue and you can get on with other stuff rather than waiting on hold. They sorted my code Friday afternoon and work payroll got the update today.
Oh they’ll ask what you expect to be your total taxable income for the year, so work that out in advance.