Does anybody know how tax codes work?

[pooroldcodger]

This is not for me, but for Codgeress junior, who is a Uni student.
Last summer she had 2 holiday jobs. One in a shop and one in a restaurant.Bothe employments amount to less than £1200
She was taxed on her wages, so she is owed a refund.
Today she has received a tax code for employer"A" just as "BR".
For employer "B" she has received a code of 461L in one letter, and on the same day another letter giving, for the same employer a tax code of 482T.
This seems to suggest to me that they have split the allowance in half, but then only re-allocated half of it. The letter says that for employer "B" she has a balance of tax allowances of £4828, and a tax free amount of £4828. But it then goes on to say that if she earns more than £4828 with employer "B" (which she won't) then she gets taxed at 20% etc.
Does this seem right, or is it an HMRC screw up?
I'm completely baffled!

 

[Focus Owner]

im sure stu knows. do that alert thing on him.

 

[pooroldcodger]

What's an alert thing?

 

[Focus Owner]

you type a name somehow, and it shows up on the top left stu_demond i think

NAME

Stu DemonD

done so its @ then name typed correctly

 

[pooroldcodger]

OK thanks. He might see it when he gets chance.

 

[306maxi]

http://www.ir35calc.co.uk/uk_tax_codes_guide.aspx

This explains it all

 

[Stu DemonD]

What is the breakdown of the 482T code - it should start off with her personal allowance but there must be other adjustments in it.

Out of interest, I take it these were income in summer 2012 and she is not working for them anymore? If so, even if HMRC are issuing tax codes now, nothing will happen with them - how can it, if she has no more income to come from them. To work out the refund, she will need to have both P45s to hand - what were the codes on each employment once she left?

Although did she not use a P38 (Student) ?

 

[pooroldcodger]

Thanks Stu.
The 482T code is described like this:
"This is how we worked out your tax code:
balance of tax allowances £4828 (note 1)
a tax-free amount of £4828 (note 2)"
Note 1 says: "We know you have another job or pension(you may get a P2 Coding Notice for that job or pension too). We have used some of your alloqances to give you a tax-free amount at this job or pension"
Note 2 says: " If your income from the year from xxx(employer B) is more than £4828 you will pay tax as follows:
20% on the first £32010
etc.
Employer "A", the restaurant, she is still working for them in this financial year, albeit only during Uni holidays, so she didn't have a P45 from them, but employer "B", the shop, she has not worked for them since the summer, and she did get a P45. She is also unlikely to work for them this summer. I am sure that she handed in a P38 to the shop, but being as she is a student living away from home I need to wait for her to wake up to check!!
You are right though. She is never going toearn more than the basic allowance threshold, so all she wants is a rebate on the 20% tax she had deducted by employer "B". Employer "A" didn't deduct tax at all.

 

[Stu DemonD]

Sorry for the late reply, been out working all day! January is a fricking nightmare ...

I presume she isn't under Self-Assessment, so best bet would be to get her P45 from Job "B" and ideally her P60 from Job "A" [or if she was under P38S (Student) then she must have a record of her earnings to 5th April 2012] - then with both in hand and her NI number, she should call HMRC and explain the situation 0845 300 0627

http://www.hmrc.gov.uk/incometax/overpaid-thro-job.htm

They will then add both together and send out a refund - you don't want any refund to be coded out for the current year.

 

[pooroldcodger]

Thanks Stu. I appreciate your reply at all at such a busy time.
No she isn't under self-assessment, and yes she has a P45 from job "B" and a P60 giving details of earnings up to 5th April 2012. She will also be able to tell them her earnings in job "A" to date if they want it. We now just have to get round the problem of phoning and no doubt hanging on the line of an 0845 number from a mobile. I am guessing that they wouldn't speak to me about it if I phoned them?

 

[Stu DemonD]

No, they can only speak to the tax payer or an authorised agent - I tend to use dedicated lines, which bypass the queuing options!

Try this 01355 359022 from www.saynoto0870.com but it does state:

" Taxes Helpline
This is “overseas” number. Withhold your num (using 141) when calling from UK or else the call will be blocked. Expect to be told off for not using premium number!"

"This alternative UK geographical number is published for calling from abroad, but has the advantage that it bypasses the laborious menu options and gets straight through to an operator."

 

[pooroldcodger]

Ha Ha! OK, will try that, thanks.
By the way, out of interest, if she didn't phone them at all, would she get a refund anyway albeit eventually?

 

[Stu DemonD]

By the way, out of interest, if she didn't phone them at all, would she get a refund anyway albeit eventually?

Probably - in a few years or something ....

 

[pooroldcodger]

She can't wait that long - her local pub are already feeling the pinch!
Thanks again for your advice. I / we appreciate it.

 

[306maxi]

Probably - in a few years or something ....

hmrc aren't too bad with refunds. May would be a worst case scenario

 

[ChrisUK]

I've been working for nearly 10years and never had a refund . I'm pretty sure I'm due one too when I left a job half way through the tax year and was out of work 3months or so waiting for security clearance.

 

[306maxi]

How many years ago?

 

[Stu DemonD]

hmrc aren't too bad with refunds. May would be a worst case scenario

Ok if under self-assessment, refunds come through quite quickly once filed.

I am currently looking into a client with PAYE earnings going back to 2005/6 - all the HMRC calculations aside from one year are incorrect, plus they tend to code them out if you remain under PAYE - which is not ideal in this situation of the OP.

 

[306maxi]

Mine have always been fairly quick