TAX CODES

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:08AM in AAT student discussion
Hi All - How would i know what tax code an employee has, Isnt there a standard one that most people use? How is a tax code established

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    TAX CODES

    Hi<BR><BR>Tax codes vary from person to person, depending on pay in previous years etc. You'll be able to find it on a P45. If a new employee hasnt' got a P45, do a P46 for them and start them on 'Week1/Month1' basis with the basic tax code (currently 489L)<BR><BR>Neil
  • System
    System Posts: 100,534 🤖 Admin 🤖
    TAX CODES

    You wouldnt really know what tax code someone is due to without haviing it confirmed by the inland revenue. A tax code is made up of allowances, which vary from person to person and other adjustments for underpayments of tax in previous years.<BR>The most common code is the one used as emergancy code. At the moment that is 489L. If you add a 9 to the end of the number, e.g.4899, that figure is the amount of pay the person can earn in a year before they begin to pay tax.<BR>Hope this is of some help<BR>I'm an ex Tax officer so used to be my job to work out the codes.<BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    TAX CODES

    The standard tax code this year is 489L. this means that the employee is entitled to £4895 free pay. <BR>Although this is the tax code most people are on it can go up and down depending on an employees circumstancess (eg benefits in kind). For example if the tax code is 225L they receive £2255 free pay.<BR><BR>Another common tax code is BR- this means the emploee receives no free pay and all of their income is taxed at 22%. This is normally used when an employee already receives an income. <BR><BR>There are various ways you can find out an employees tax code. Receiving a P45 or P46 from the employee, or you can find out from the Inland REvenue (vis P6 and P9 forms)<BR><BR>Is this all you need to know? If you need any more info you can email me at tonitib@lycos.co.uk<BR><BR>Toni
  • System
    System Posts: 100,534 🤖 Admin 🤖
    TAX CODES

    Thanks for all of your responces. Just to varify - If they only have one type of income (employment) it would be safe to use the code 489L.<BR>tHANKS
  • System
    System Posts: 100,534 🤖 Admin 🤖
    TAX CODES

    As long as you use week one basis. I take it you dont have any details of previous pay and tax.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    TAX CODES

    I do have previous records, however the person before me did not bother to change the tax codes. The ones that are currently there is 461L. Correct me if im wrong but this is no longer in use as its a few years old.<BR>Nic
  • System
    System Posts: 100,534 🤖 Admin 🤖
    TAX CODES

    Sounds like you should be using 489L<BR><BR>If you call the tax office with the employees NINO they will tell you there and then what the code should be!<BR><BR>Amanda

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