wrong tax code used

[fionacr]

Hi,

wonder if anyone can help me regarding incorrect tax codes used on my payslips for a few months in 3 different tax years.

in tax year 2006 - 2007 tax code was 503L for the year but 468L was used in month 1

in tax year 2008 - 2009 tax code was 603l for the year but 543l was used in months 1 - 5 inclusive

in tax year 2009 - 2010 tax code as 647l for the year but 603l was used in months 1 - 4 inclusive

it suggests to me that employer didnt update to the new years tax code in month 1.

Is it worth reclaiming the tax back on these mistakes

thanks very much
Fiona

[JRG]

Under PAYE your annual tax bill is automatically adjusted on application of the latest Tax Code.

For example, in 2009-10 for months 1 - 4 you would have been taxed using Tax Code 603L. When the 647L Tax Code was applied in month 5 your income tax bill would have been adjusted to reflect that the 647L Tax Code had been used from month 1. For month 5 your payslip would have shown a lower income tax figure to reflect the 'refund' of the excess income tax paid in months 1 - 4. From month 6 your payslips would have shown an income tax figure that was lower than months 1 - 4 but higher than month 5, assuming that your monthly salary is constant.

Your employer can only update your Tax Code after notification from HMRC, which would be about the same time you receive it.

If your Tax Code is correct at the end of each tax year (i.e. in month 12) then your income tax would be correct, and you have nothing to reclaim.