1st Contact works alongside individuals and smaller, local businesses to offer a worry free solution to accounting issues. We realise that many of you may feel that you are struggling alone against the recession, especially when the news only focuses on the big corporate stories of the day. Well worry no more - we are running a series of news stories on the issues that affect you, explained in clear terms so you can make sense of what is going on in the world that affects you.
With the new financial year just around the corner, Tax Offices will be sending out PAYE Coding Notices which will inform you of your current tax code. It may stay the same, or it could change for a number of reasons. Let's look at tax code increases, what they mean, and how to deal with them. Many people see company benefits that they receive in addition to their salary reflected in their tax code.
These can include things like:
· car benefit · van benefit · fuel benefit · loans from their employer · medical insurance
If you are no longer going to be receiving benefits such as those on the list you need to make sure you tell your Tax Office so that the change can be reflected in your tax code, thereby preventing you from paying too much tax.
Any tax code changes will be reflected in a PAYE Coding Notice which will be sent out to you & Form P6 will be sent to an employer to inform them - as soon as they receive this they should apply the new tax code.
If you are on an emergency tax code it does not take into account any additional allowances you might be entitled to, so as soon as your correct tax code is worked out by the tax office you are likely to see an increase in your tax code.
If the Chancellor announces increases in personal tax allowances or other benefits these will be reflected in your tax code. Many employees saw an increase in their tax code in September 2008, when the basic Personal Allowance for 2008/09 was increased by £600.
Inform the tax office if you get married or form a Civil Partnership, or if you start to receive additional sources of income - as these can all affect the amount of tax you need to pay.
You might be able to get tax relief on expenses paid to you by your employer. They will be shown on your PAYE Coding notice as things like job related expenses or subscriptions. The receipt of certain state benefits can affect your tax code as well, so if you start or stop receiving any benefits then inform the tax office.
Other sources of income such as rental or investment income can also be reflected in your tax code if you already pay PAYE, so if there are any changes to these sources of income then let the Tax Office know as soon as possible so that your tax code can be adjusted.
1st Contact are here to help if you have concerns about personal tax issues, so do not hesitate to get in touch.
1st Contact Tax offers specialist tax services to contracting professionals.
These services include: Contractor Accounting, Contractor Umbrella payroll, Personal Tax for Contractors, Limited Companies for Contractors and Contractor Financial Advice.