Sunday, 7 February 2010

Tax codes and how to check yours and get a refund part 3!

That was easy wasn’t it? Now all we need is for you to get your last payslip (if you have one) go on go find it!
Checking YOUR Tax Code on your wage slip and the questions to ask yourself.
Remember remember we are only talking about this year’s tax code. Errors can be resolved from 5years ago and refunds can be collected by you!

Q. Does your wage slip show 647L with the boxes which say week one and month one left blank?? A. If yes and you are planning on working a whole tax year this is probably correct in 99.9% of cases. BIG BUT! Q. Have you had periods of unemployment earning less than your yearly allowances in the last 5yrs and perhaps paid income tax?
A. Check your P60’s (this is a statement of earnings and tax deducted that you receive from you employer each year around the month of May) Never ever throw your P60 away!! This is sometimes the only proof you have of earnings and tax deducted from your wages. AND!! If you have lost your job from a company that has gone bust there is the likelihood of your income tax and your National Insurance contributions not being credited to you account at the tax office and the NI office.
Q. Does your payslip show 647L and one of the boxes marked week 1 or month 1 has an x in it?
A. If yes.....why are you on emergency code???? This is a common problem which often creates a situation where too much tax being taken out of your wages.
Q. If your tax code is less than 647L do you know why?
Possible reasons for this are: You receive taxable benefits from your employer such as a company car, petrol allowance and private health benefit such as bupa. If the average person doesn’t get these benefits from an employer we have to pay for these out of our income that has already been taxed. It is only fair then, that you get penalised for having this benefit that the average person doesn’t get! However, if you can convince the tax office that your company car is not used for pleasure by you (because you have another car at home you use in evenings and weekends) take it up with them and get the allowance dropped............this is possible I can assure you! On average your car benefit could be approximately £3500 per year and health benefit £700 per year 3500+700=4200.00 taxable benefit. So, the sum is, when reflected in your tax allowance as follows. Tax allowance 6475.00(remember everybody has the same starting point) -4200.00= 2275.00 approximately. You tax code shown on your payslip would be 227L. VERY IMPORTANT POINT!!!! Have you changed your job where once you did get these benefits

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