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My exceptionally generous new tax code

My exceptionally generous new tax code

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This morning I received a letter from HMRC awarding me the very generous tax free allowance of £15,469 for 2016-17. They have decided I will have "job expenses" of £4,941 that will be claimed and benefits in kind of £472.

I have never claimed "job expenses" and have never had benefit in kind.
Is this a careless error by HMRC? Of course not - they are never wrong.

I have no plans to waste time telling them they are wrong.

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04th Apr 2016 13:18

We've had them too

One employee of a client got a stinking great tax allowance despite having no other income, no benefits  and no job expenses. Other clients have had their tax allowance split over 2 employments (for the same company) where the client only has one employment, non-existent pensions given a tax code, etc.

Such fun (not)!

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04th Apr 2016 13:23

Incompetence

I've seen a couple where coding has been increased over the personal allowance by adding on the gross amount of gift aid payments and the gross amount of pension payments which had been paid under deduction of basic rate tax. 

No tax on a salary in excess of £16,000 if the code had been applied.

The person concerned wasn't even a higher rate taxpayer

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04th Apr 2016 13:39

problem is... some firms will automatically used code...

I had a client who a couple of years ago also received an incorrect code due to supposed job expenses. If I told HMRC once I must have told them a thousand times that the client had left his previous employment and was not getting anything and the code should be the usual.

Unfortunately his new firm used the code ('we have to HMRC says...') and my client had a large underpayment going over 3 years.

I was up for a fight and wanting to do a formal complaint but clients said he couldnt stand the grief and paid up although it was difficult for him to do so.

If I received such a code I'd ignore it but others wont or cant.

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04th Apr 2016 14:01

Had one last week

HMRC had included 'job related expenses' of £24,000.  Client has never had any whatsoever.  HMRC chap was as confused as I am as to how it happened!

The tip of the iceberg methinks.

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04th Apr 2016 14:07

They are coming thick and fast.

I had a client who one of his staff ( a painter) had just received a K code for the coming tax year and had no idea what it was for.

I explained it to him and once he understood it would do to his net pay he rang HMRC to get it sorted. I think the conversation ended with him threatening to shove his paint brush up the tax mans arse[***] if it wasnt sorted before his April pay was due.

Not sure if turpentine would help remove that one.

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By Kazmc
04th Apr 2016 15:03

.

Glennzy wrote:

I had a client who one of his staff ( a painter) had just received a K code for the coming tax year and had no idea what it was for.

I explained it to him and once he understood it would do to his net pay he rang HMRC to get it sorted. I think the conversation ended with him threatening to shove his paint brush up the tax mans arse[***] if it wasnt sorted before his April pay was due.

Not sure if turpentine would help remove that one.

 

OMG I just spat my tea everywhere! thanks for cheering up my Monday

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04th Apr 2016 14:44

Bodes Well

It all bodes well for Quarterly Reporting.

What a doddle it'll be !!

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04th Apr 2016 15:06

.

I had a client issued with K4752, and BR.  On the same coding notice for the same employer!

 

 

 

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04th Apr 2016 15:50

Recently

had one with a higher rate adjustment for 2016/17. Two problems:

1) Client has only ever been basic rate

2) My crystal ball doesn't work

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04th Apr 2016 16:17

I'm having a lot of those

The Innkeeper wrote:

had one with a higher rate adjustment for 2016/17. Two problems:

1) Client has only ever been basic rate

2) My crystal ball doesn't work

Almost as odd, clients with only one source of PAYE income, so if they have higher rate tax due it will be due to the sole PAYE source, plus benefits (in code) and other income (in code).

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05th Apr 2016 10:17

Things will only get more interesting when HMRC

try to estimate the tax due on savings interest over the Personal Savings Allowance. 

There have already been cases hightlighted on Radio 4's Money Box where HMRC seem to have estimated next year's savings interest without any basis.

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05th Apr 2016 16:44

Who ?

Samantha20 wrote:

......try to estimate the tax due on savings interest over the Personal Savings Allowance. 

Who on earth is going to have savings interest over the PSA ?

I don't have one client who gets that much interest.

(Although that may change with the advent of Dividend Tax ......)

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05th Apr 2016 19:03

According to Paul Lewis

lionofludesch wrote:

Samantha20 wrote:

......try to estimate the tax due on savings interest over the Personal Savings Allowance. 

Who on earth is going to have savings interest over the PSA ?

I don't have one client who gets that much interest.

(Although that may change with the advent of Dividend Tax ......)

According to Paul Lewis around 5% of taxpayers get more than £1,000 (or £500) in savings interest.  Most will probably be retired so wouldn't be clients.

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By jcace
05th Apr 2016 22:54

Not all generous

Have a client who has an employee (manual labourer) who was issued with a 2016/17 code of K131425, to be replaced three days later with K131425, to be replaced four days later with..... 1100L.

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06th Apr 2016 08:41

It does work both ways - I have a client whose basic allowance was decreased by some £10,000 for 'Income now ended'. He has none. If I were to use some number drawn from some such dream figure in accounts submitted to HMRC, I would be hung, drawn and quartered. Can HMRC now use any amount they like in their calculations?

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06th Apr 2016 08:55

Not only that

but they can take as long as they like to deal with correspondence but if we are 1 nanosecond late in responding to their correspondence and the deadline that they have imposed all hell can break loose

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