Calculate tax code to "code out" arrears.

I need a way to calculate a replacement tax code to repay an arrears amount.

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I have the pre-existing salary figure, the current tax code, and the amount to be "overpaid" to cover an arrears. 

Is there a formula or online calculator to allow me to work out a new tax code ?

Replies (3)

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By GW
01st May 2018 00:11

You need to know the amount of tax and the marginal tax rate.

If you want to collect £100 tax from a 40% tax payer, the personal allowances need to be reduced by £100 divided by 0.4, which is £250.

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By tonycourt
01st May 2018 11:24

Just refining the previous answer - it is not the marginal tax rate (highest tax rate) on all income, you should use the marginal rate payable on the salary alone.

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By Marion Hayes
01st May 2018 13:01

The basic answer is wait for HMRC to tell you. Under PAYE regulations you are only allowed to operate code numbers provided by them, self help is not allowed, so if you want it sorting quicker you will need to ring them

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