Ready reckoner for tax codes...?

[Geoff T]

Hi Elaine et al,

I was wondering if this would be possible please?

If the taxman is planning to reclaim a lot of this money through changing tax codes, would there be some way of checking - and challenging - their calcs? (on the basis that if you gave them an abacus, they'd probably try and double glaze the thing!).

A VERY simple example would be:

"You've been on 653L, but owe £2,000 tax so next year's code will be 453L" (to reclaim the 2k tax).

I know you'd need to allow for the tax rate etc, but I'm using this a truly basicexample to illustrate the point...

Could something like that be possible please?

I'm just thinking that it will help automate some of the process for you, so will only highlight and redirect those who get an "error" message... if the calc comes back "looks OK" then the recipients will know not to shout...

Does that make sense? Sorry if not... I'm hoping the smarter knives in our drawer will understand...:redface:

Lastly - good on all those involved - "pro bono" in the purest sense...

 

[elaine@cheapaccounting]

Good idea - let me think it through, although .....

To collect £2000 in tax owed at basic rate means a change to your code of £10,000

Tax code of £10000 tax at 20% = tax of £2000!

So a negative tax code of £6475 - £10000 = - £3525 know as a K code (I think - where is Tom?)

I am just wondering how many people are in for a big shock when they have their tax code adjusted and see that they have up to £166 less a month in your pay packet (assuming basic rate tax).

Amounts over this will not be collected through tax code.

 

[Geoff T]

Don't get thrown by the thousands - try hundred's instead if easier - say 500 to 1000.

Please don't let the oversimplfication throw you off - just thought it might help automate the work some... do the job once and not 840,000 times (type thing)

 

[elaine@cheapaccounting]

We would just plug the figures into a self assessment - or I would anyway

 

[Geoff T]

We would just plug the figures into a self assessment - or I would anyway

you're the expert Guv - if you say it works, then it's worth more to me than a letter from the berks at HMRC....

 

[elaine@cheapaccounting]

you're the expert Guv - if you say it works, then it's worth more to me than a letter from the berks at HMRC....

it works - happy to check anyone's for them

 

[Geoff T]

it works - happy to check anyone's for them

Don't take it funny guv - I meant it

But if it makes you feel better... back at ya... just to keep things at the status quo...

Don't let the aside throw you off the idea mind

 

[Tom McClelland]

Yes, the stated example of recovering £2000 from a basic rate taxpayer in a single year would change their tax code to something like K353.

Amounts above about £2000 IIRC they are demanding instantly as a single payment, on the grounds that if the error is that big the recipient is wealthy enough to afford it. :|