In UK tax news, the Personal Allowance amount, or the figure you can earn before paying income tax, will go up to £12,500 for the 2019-20 tax year. The numbers section of tax codes gives this number. For employees it is: 1250L. Read on to see if you are entitled to a Paye tax refund.
When Does the New 2019/2020 Tax Code Start?
Tax codes run for the tax year; 6th April to 5th April the following year. The 1250L tax code is in effect from 6th April 2019 to 5th April 2020. The tax code can change during the tax year if there is a change in your company benefits or you made a claim for work expenses.
What Do the Letters in the 2019/2020 Tax Code Mean?
Here are the meanings of some commonly used letters in UK tax news:
L: Basic rate taxpayer in England
OT: No tax allowances because you earn over the designated threshold
M: You benefit from the Marriage Allowance (suffix)
N: You have transferred your unearned allowance to your partner under the Marriage Allowance scheme (suffix)
Do You Know What Your Tax Code is Changing to?
Knowing the correct tax code is important for your finances. If you get it wrong, you will be paying the wrong amount of tax. If you pay too little, you will owe HMRC, too much and you may be entitled to a Paye tax refund.
How Do I Get My New 2019/2020 Tax Code?
The tax code changes annually because part of the code informs how much you can earn before you need to pay income tax. HMRC will send a P2 Notice of Coding informing your new tax code. As an employee, HMRC will send your employer the new tax code which will appear on your payslip.
Related Post: What is the 2019/20 PAYE Tax Code?
Should My Tax Code Be the Same as My Colleague’s, if We’re Doing the Same Job?
No. You may have the Marriage Allowance and they don’t, or they get additional income from a pension and you don’t. There will be other taxpayers with the same code because they have the same financial situation, not because they do the same job and earn the same wage.
What Should I Do if I Think My Tax Code is Wrong?
Call HMRC immediately. Do not ignore it and wait for HMRC to send a notice. It’s your responsibility to maintain the accuracy of your tax position. They will check and help you rectify any issues.