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  • New Income Tax code at 259L

    Hello, Last year, after I submitted my Self assessment around July, I had to pay circa £1,800 back due to Child Benefit - as my income was above 60k. I agreed this to be deducted from my salary over the rest of the tax year. My Tax code changed from 1257 to 384. Recently I got my Tax code letter for next financial year - 23-24. However I can't understand below : 1. Why my tax code has decreased further to 259. 2. Why is there an underpayment of £1,373 when whatever I owe is already being deducted from my salary by means of this lower tax code which changed around July 3. On what basis is my next year's underpayment showing as £4,895 I'm very confused on how these numbers are deduced. Am I doing something wrong? Will appreciate any help/guidance you can provide to understand this. I've copied below the Income Tax comparison for me from HMRC site. Thank You. --------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Tax codes Employer or pension Current tax year ends 5 April 2023 Next tax year from 6 April 2023 ------ 384LX 259L Tax-free amount Your tax-free amount is the income you can have before paying tax. Your Personal Allowance may be different depending on your circumstances. Personal Allowance How we calculate it Current tax year ends 5 April 2023 Next tax year from 6 April 2023 Personal Allowance £12,570 £12,570 Additions Additions Current tax year ends 5 April 2023 Next tax year from 6 April 2023 Gift Aid Payments £175 £175 Job expenses £312 £312 Deductions Deductions Current tax year ends 5 April 2023 Next tax year from 6 April 2023 Underpayment from previous year £1,373 £4,895 Child Benefit £4,712 £5,187 Estimated tax you owe this year £2,743 not applicable Your total tax-free amount Your total tax-free amount Current tax year ends 5 April 2023 Next tax year from 6 April 2023 Your total tax-free amount £3,849 £2,595
  • Child Benefit Tax

    Hello, I have 2 kids - and I claim Child Benefit for both which comes up to circa £1827 per year which I get from the government. As I recently fell into the 60K tax bracket, I expected that I need to repay this £1800 back to the govt. However, I got a PAYE change letter from HMRC which says that Child Benefit is £4712. Can you help me understand how the £1827 changed to £4712 Below is from the HMRC site: How your tax-free amount is calculated How we calculate it Previous tax code Current tax code Personal Allowance £12,570 £12,570 Additions Gift Aid Payments £388 £175 Job expenses £312 £312 Total additions £700 £487 Deductions Underpayment from previous year You underpaid £549 tax in a previous tax year £1,373 £1,373 Child Benefit £0 £4,712 Estimated tax you owe this year We estimate you have underpaid £658.00 tax £0 £2,743 Other items from <> £380 £380 Total deductions £1,753 £9,208 Your total tax-free amount £11,517 £3,849