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Where Taxpayers and Advisers Meet

Unexplained change in tax code

Joined:Wed Aug 06, 2008 3:42 pm

Postby siam » Wed May 07, 2008 2:29 am

I have lived outside the UK in SE Asia for over 10 years and my only UK income is a Civil Service pension of about £10,000 p.a. plus any interest on the UK bank account that the pension is paid into. I have just received a P60 which shows last year's tax code as 522L. An accompanying letter from Civil Service Pensions states that my tax code for this coming year will be K20.
My circumstances have not changed and I spend less than 2 months a year in the UK.
Is this likely to be a mistake or does anyone know of a change in tax legislation etc. which would have caused this dramatic change in tax liability? Many thanks and, if the answer is obvious, sorry I'm not au fait with UK tax matters now.

Simon Sweetman
Joined:Wed Aug 06, 2008 3:11 pm

Postby Simon Sweetman » Wed May 07, 2008 3:55 am

This seems very odd - have you not had a notification about the new coding which would explain what they think they've done ? If not, then you are going to have to contact HMRC for an explanation - there is nothing obvious and it would seem likely to be an error.

Joined:Wed Aug 06, 2008 3:42 pm

Postby siam » Wed May 07, 2008 4:28 am

Thank's Simon, I'm grateful for your response. I have received no notification or explanation just a new tax code.
I will write to HMRC, thanks.

Joined:Wed Aug 06, 2008 4:06 pm

Postby smithy05 » Wed May 07, 2008 7:58 am

Have a look at your code again and it should show you how the tax code is made up. Quite often when you begin to receive your State Pension a K code can arise. It should say somewhere what the restriction is.

Joined:Wed Aug 06, 2008 3:42 pm

Postby siam » Wed May 07, 2008 5:34 pm

Hi Smithy,
This is a pension that I have been receiving for many years - not a state pension but a Civil Service pension. There is no explanation whatsoever - just an alteration in the code on what is effectively a payment advice for the first payment in the new tax year printed on the reverse of the P60. The new code has been applied and the corresponding amount deducted. No prior warning, no explanation. No communication about it. Just a changed code (and lower payment, of course).

Joined:Wed Aug 06, 2008 3:40 pm

Postby al_eebee » Thu May 08, 2008 5:35 am

Have you registered to receive interest from the bank gross, and is it substantial (say around £6k per annum)?

If so I suspect that HMRC have amended the code to take into account untaxed interest received, so that you do not have tax to pay re the interest on 31 Jan following the end of the tax year.

Write to HMRC and ask for a copy of the coding notice as you have not received one but note the code has changed

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