On a P60 for 2007-08 what does code "BR X" mean? I am aware BR = Basic Rate, but X, cannot find on HMRC website? The employee joined from another employment during the year and the P45 code was 522L. Soon after joining, HMRC issued a code of BR, but no other letters, so on a cumulative basis, not month 1? However, the employer does not appear to have deducted enough BR tax, and a P800 for £550 underpaid tax has just been issued, does ESC A19 apply?
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Code BR & week 1/month 1 basis...
X = week 1/month 1 basis (W1/M1) this means that if the code decreased from what it was previously, the W1/M1 basis prevents recalculation of the tax due from 6 April up to the date the amended code operates. Failure to do this would result in all of the tax due from 6 April being collected in one fell swoop.
A W1/M1 basis should always be operated when a code decreases for this very reason; now I know that and you probably know that but would an employer/employee be aware of this mechanism?
Almost certainly Wk1/Mth1
because to have operated BR cumulative on receipt of the code from HMRC having used 522L from the P45 would have taken the whole £550 now shown underpaid on the P800 in the first month.
Presumably this was not the clients only employment if BR was issued and there is now an underpayment?
I am just pleased...
... to see "fell swoop" quoted correctly, makes a pleasant change, especially when someone does it off their own bat!
I suspect they deducted the right tax
Apparently the client retired and handed the P45 to the new p/t employer who operated 522L.
HMRC got themselves sorted re the various employments and pensions and issued BR to the p/t employer.
The p/t employer realised that if they operated BR on a cumulative basis, having used 522L cumulative already, the client/employee would get hit for £550 tax the following month and so used the Week1/Month1 basis - which I have at the back of my mind as being the correct basis, but cannot firn the relevant reference to this just now
Fair enough. I merely made the point as you appeared to be tryin
This late in the day ESC A19 might be relevant, if only because we are talking about over three years ago.
Playing devils advocate, with that mix of employments and pensions happening in the year one could say that the client might expect nothing else, but an uneducated (in tax) and presumably unrepresented (at the time) client could easily expect that all was correct, particularly with the change of code to BR and possibly no warning that this was on non cumulative basis and likely to leave an u/p at the end of the year.
So for all those reasons a punt at ESC A19 might well be worthwhile.