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Paying Tax, Tax Codes

What Does Tax Code NT Mean?

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Tax Code NT

tax code NTEach person in in the UK is assigned a tax code for each tax year, whether that be at the beginning of the tax year or further into it, when a tax code may be changed.

In fact you may be given different tax codes for different earnings sources.

There are various different codes – some have numbers and letters and some just consist of a letter or letters and NT is one of those.

The tax code NT means essentially that no tax is due on those earnings.  The company/entity paying you will have been instructed not to deduct tax from the earnings by HMRC and they may or may not know the reason for this.

There may be different reasons for being given this tax code and if you have this tax code then it may be because of your own personal circumstances so you can always call the tax office to find out why if you are unsure.

As an example, NT can be used as a tax code for people who have non-resident status or for people whose income would be classed as self-employed and hence taxed on their own tax return. It may also be applied in some cases for Armed Forces pensions (but not all situations).

Tax Codes

What Does Tax Code BR Mean?

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BR tax codeIf you have been given a tax code notice and you are wondering ‘what does tax code BR mean?’ then here is an explanation.

The tax code letter BR stands for Basic Rate. This means that any earnings that you get under the employment (or pension) that has that tax code (and you may have different tax codes for different sources of income), will be subject to tax at the basic rate.

For the tax year 2018/19 the basic rate of tax is 20%.

Tax codes often have a number before them and then a letter but in this instance, as the number refers to how much personal allowance you have, there is no number, just the letters BR.

Normally you will be given a personal allowance (£11,850 for 2018/19) which means that you can earn that amount of money over the tax year without being charged tax on it.

So, with a tax code of BR, that personal allowance will not be applied to the earnings from that source. It may well be that your personal allowance has been used up elsewhere (another job for instance or another pension source) so you cannot also apply it to this source of income.

So if for example you earn £1600 in a month then you will be taxed £320 (20% of £1600) for that month.

In fact even if you earn enough that your earnings would normally be taxed at a higher rate then you will still be taxed at 20% on this tax code and any adjustments will either need to be made once the tax code is changed or through your tax return.

The tax code BR differs from the code 0T in that if you are on 0T you will be charged higher rate tax if your earnings enter into that bracket.

It is possible that you have been given this tax code incorrectly (if you have been given it and you don’t have any other source of income for example). In which case you should get in contact with HMRC as soon as possible so that you don’t end up paying too much tax.

You can call HMRC on 0300 200 3300.

Tax Codes

Tax Code 0T

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Everyone who has a tax code will notice that it usually has a number and letter as part of the code.

Sometimes the tax code that you will be given for a particular job or income stream may be 0T (note that this is a zero not OT).

The zero denotes that you will not be given any personal allowance for the income that has been assigned the UK tax code 0T.

This may be because you have used up your personal allowance elsewhere, or perhaps you have started a new job and your employer does not have enough information for your tax code as yet.

The 0T tax code means that all of your income will be taxed for that income stream. The tax rate depends on how much you earn from that work/pension as to whether you will pay basic rate tax on the earnings or if you earn enough from that job (if indeed it is employment) to pay higher rate tax.

It is possible that a 0T tax code will be corrected down the line, as it is often used as an emergency measure, so if you believe that this is not correct it may be worth contacting the inland revenue to check that they have all of the correct information for you.

Once the Inland Revenue have all the up to date information they can send through the correct tax code to your employer and you may start to pay less tax than you would do on a 0T tax code.

If the tax code is corrected within the tax year then it is likely that you will get an adjustment to your tax once your employer has the correct code and that may involve effectively refunding tax from when you were on the UK tax code 0T by reducing the amount payable once the code has changed.

If it is near the end of the tax year when you are given the 0T tax code and it is not corrected before the end of the tax year (assuming it is wrong) you may need to reclaim overpaid tax from the Revenue.

In any case you can contact the Inland Revenue on 0300 200 3300.

 

 

Tax Codes

Tax Codes 2018/19

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It is generally the case that UK taxpayers will be issued with a new tax code each year. Tax codes are issued to individuals and their employers so that the employer knows how much tax they should deduct from the employee’s earnings each week or month.

Standard tax code for 2018/19

The most common  tax code for those with simple financial situations in 2018/19 (for example, having only one job, no tax owing from previous years, no other employee benefits etc) is 1185L.

This standard tax code means that you are entitled to the UK personal allowance of £11,850 for the year and therefore that is the amount that you can earn before any tax is deducted.

But it may be the case that you have a different number for your tax code or perhaps your code has another letter at the end (instead of L).

If this is the case then one or more of the following situations may apply to you which may affect your tax code (and these are just some examples):

  • you have earnings from another job
  • you receive benefits in kind (e.g. company car)
  • you owe tax from previous years
  • you also have pension income
  • you have or you receive a transfer of the marriage allowance
  • you have earnings over £100k for the tax year
Confused about your tax code?

If you can’t figure it out why you  have a particular tax code, you will probably need to speak to the Inland Revenue to check that you have the right tax code and will not be paying too little (or indeed too much) tax in 2018/19. The number to call for tax code queries is 0300 200 3300.

Or you may find it easier to check your tax code online which you can here do if you have a Government gateway ID.

Tax code letters

So the letters at the end of the tax code may also give you an indication of what your code is all about.

There are a couple of new tax codes that have been introduced recently which take account of the new transferable marriage allowance – those are the letter M if you have received a transfer of the marriage allowance and the letter N if you have given a up part of your allowance. You can find more information on those letters here.

You can check out a full list of the tax code letters and what they mean on the Inland Revenue website.

Tax Codes

Tax Code Letters M and N

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Transfer of the personal Allowance for Married Couples and Civil Partnerships

If you have the tax code letter M or N after the number in your tax code notification then these two letters are linked as it means that you  have either transferred or have received a transfer of the 10% personal allowance to/from your partner.

The marriage transfer allowance was introduced so that those who did not pay tax on their earnings up to the full personal allowance, could transfer 10% of their allowance to their partner (as long as their partner was only paying basic rate tax).

So, for example if your tax code for 2018/19 is 1304M that means that your partner has transferred 10% of their personal allowance to you (amounting to £1,185).

This 10% is added on to your personal allowance of £11,850, giving you a total personal allowance of £13,035 (the figures are rounded for the tax code).

Conversely, if your tax code is 1066N then that is likely to be because you have volunteered to give up 10% of your personal allowance to transfer over to your partner who can make use of it. You can do this if you don’t use all of your personal allowance.

This is worked out by taking £1,185 away from £11,850, thus giving you a personal allowance of £10,665 (figures are rounded).

(The above figures are based on amounts for the 2018/19 tax year.)

If you believe that your tax code is wrong then you should contact HMRC on 0300 200 3300.

 

 

Tax Codes

Tax Code Letters – L

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Letter L

When you are given a tax code it will consist of some numbers followed by a letter.

The number will indicate how much personal allowance you can have in the relevant tax year and the letter gives you more information about how that number was arrived at.

In the case of the letter L, this is the most common letter used as it is given to those people who are entitled to the standard personal allowance.

If you are assigned the letter L at the end of your tax code then it is likely that you have pretty simple tax affairs.

In order to work out the amount of personal allowance that you are are entitled to you will need to multiply the number by 10 to get the actual figure.

So for example, if your tax code is 1150L then you multiply 1150 by 10 and you get a personal allowance of £11,500 (which is the standard personal allowance for the tax year 2017/18).

If you believe that your tax code is wrong then you can ring HMRC on 0300 200 3300.

 

 

Tax Codes

2017/18 Tax Codes

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It is generally the case that UK taxpayers will be issued with a new tax code each year. Tax codes are issued to individuals and their employers so that the employer knows how much tax they should deduct from the employee’s earnings.

Standard tax code

The standard 2017/18 tax code for those with simple financial situations (for example, having only one job, no tax owing from previous years, no other employee benefits etc) is 1150L.

This standard tax code means that you are entitled to the UK personal allowance of £11,500 for the year and therefore that is the amount that you can earn before any tax is deducted.

But it may be the case that you do not have this standard tax code or perhaps your code has another letter at the end (instead of L).

If this is the case then you may have one or any of the following which may affect your tax code (and these are just some examples):

  • earnings from another job
  • benefits in kind
  • tax owed from previous years
  • pension income
  • transfer of the marriage allowance
  • earnings over £100k
Can’t figure out your tax code?

If you can’t figure it out though, you will probably need to speak to the Inland Revenue to check that you have the right tax code and will not be paying too little (or indeed too much) tax in 2016/17. The number to call for tax code queries is 0300 200 3300.

Or you may find it easier to check your tax code online which you can here do if you have a Government gateway ID.

Tax code letters

So the letters at the end of the tax code may also give you an indication of what your code is all about.

There are a couple of new tax codes that have been introduced recently which take account of the new transferable marriage allowance – those are the letter M if you have received a transfer of the marriage allowance and the letter N if you have given a up part of your allowance.

You can check out a full list of the tax code letters and what they mean on the Inland Revenue website.

Tax Codes

Tax Code 2016/17

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So it is coming up to the time when the Inland Revenue will start to issue your tax code for 2016/17. Tax codes are issued to individuals and their employers so that the employer knows how much tax to deduct and at what rate.

Standard tax code

The standard 2016/17 tax code for those with uncomplicated financial situations (only one paid employment, no tax owing, no other allowances due etc) will be 1100L. This tax code means that you are entitled to the standard UK personal allowance of £11,000 of tax free earnings in the tax year 2016/17. (Originally the personal allowance was going to be £10,800 in 2016/17 but the increase to £11,000 was brought forward by a year).

But lots of people have different tax codes that are not at the standard rate with perhaps different letters at the end of the code. It can be very confusing to try and figure out why you may have a different tax code to the standard one and getting through to the Inland Revenue on the phone might be a struggle (0300 200 3300 is the number to all for tax code queries). You may owe tax from previous years, you may have more than one job or your partner may have passed you part of their allowance are just a few examples of why you may not have a standard tax code.

Can’t figure out your tax code?

If you can’t figure it out though, you will probably need to speak to the Inland Revenue to check that you have the right tax code and will not be paying too little (or indeed too much) tax in 2016/17. Although paying too little tax may sound good, it will have to be repaid at some point!

Tax code letters

So the letters at the end of the tax code may also give you an indication of what your code is all about.

There are a couple of new tax codes that have been introduced this year which take account of the new transferable marriage allowance – those are the letter M if you have received a transfer of the marriage allowance and the letter N if you have given a up part of your allowance.

You can get a full list of the tax code letters and what they mean on the Inland Revenue website.

Tax Codes

Why Am I Not Getting the Full UK Tax Allowance?

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If you are a UK taxpayer then for the tax year 2011-12 the personal allowance for the year is £7,475. However, most people who are under the PAYE scheme (pay as you earn, where your tax is deducted by your employer), will be sent a tax coding notice from HM Revenue to advise you of your own specific tax allowance. Continue reading Why Am I Not Getting the Full UK Tax Allowance? →