11 February 2014 | Taxation, Payroll
It is always very important to check your tax code to make sure that you are receiving all the allowances to which you are entitled and to ensure that all your income is being properly taxed.
The Coding Notices are quite complex, but you should check the following key aspects as a matter of course.
If you have multiple employers, or lose your personal allowances because your income exceeds £100,000, or you have particularly complex affairs, then you may want to speak to us directly to check the tax code on your behalf.
Student loans are normally accounted for through your payroll payments. We have recently had a difficult case where the individual took early retirement and received a substantial pension. His income from multiple employments were each below the threshold for student loan repayments, but when we submitted the tax return, we realised that Student Loans were due on the entire income.
HMRC initially refused to adjust his tax code for his pension to reflect the current year Student Loan liabilities, initially claiming it was impossible to do so. Of course it is possible, but HMRC staff need to be persuaded to treat it as an extra adjustment and not as a Student Loan related matter.
We need to keep a close eye on the client’s coding notices to make sure that the changes do not get undone by another HMRC office.
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