Dynamic coding

Or pointless waste of time?

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Client has received a new tax code following submission of his 2017 Return. High earner, and so no PA. Also has significant dividends (£45k) and a small BIK.

HMRC have attempted to adjust his CY tax code to collect the tax on dividends and BIK. It doesn't even come close.

Is this the most pointless exercise from HMRC yet?

Replies (4)

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Caroline
By accountantccole
19th Sep 2017 11:02

They seem to particularly enjoy coding out dividends when my clients are already making payments on account! It would help if we had notifications of code changes too, rather than having to log in and check in case or relying on clients to tell us

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By Duggimon
19th Sep 2017 11:10

I'd be interested to know what they've amended it to, if you can tell us without being too revealing.

I don't tend to get involved in tax codes much so have no idea what one covering the situation you outline would look like. Nor do HMRC from the sounds of it though!

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Replying to Duggimon:
By SteveHa
19th Sep 2017 11:48

It doesn't look like very much in all honestly:

PA £0
Less
BIK £174
HRA £6,600
Dividend £1,482

=-£8,256 = K824.

Now, by my reckoning, £6,600 + £1,482 total restrictions for dividends are not going to collect the additional rate tax on £45k of dividends, whichever way you cut it. The figures make no sense at all.

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avatar
By Gideon
11th Oct 2017 11:01

At least you've got items in the code, I've just seen one
PA 11500
Adjustment to collect tax you owe £3745

All on an annual scheme salary £8164 pa.
They appear to have estimated tax due on divis and just put this random restriction in the code, no reference to anything else.

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