Tax Codes for 2017/18
The 2017/18 tax year starts on 6th April 2017. An increased personal allowance of £11,500 will mean that most tax codes will increase to 1150L.
What is the new tax code for 2017/18?
The new standard tax code for 2017/18 is 1150L. Your employer will apply this tax code on your first payslip after 6th April 2017 unless they are advised of a different tax code by HMRC.
What does the tax code 1150L mean?
The tax code 1150L tells your employer that you can earn £11,500 tax-free in each tax year. You will not pay any tax if your gross pay is less than £958 per month (or less than £221 per week)
What is the new personal allowance for 2017/18?
The standard tax-free personal allowance for 2017/18 is £11,500. This is an increase of £500 from the 2016/17 tax year, which will save you around £100 in income tax.
My tax code is not 1150L. What should I do?
A tax code is based on your personal circumstances and may not be 1150L for a number of reasons:
• You have more than one job
• You have underpayments being collected through your tax code.
• You receive taxable benefits from your company (e.g. medical insurance or company car)
• You are claiming employment expenses such as uniform or mileage allowance.
If your tax code is not 1150L, you will have received a Tax Coding Notice (usually around February) from HMRC explaining how your new code was calculated. If you think it might be wrong, you should contact HMRC.
Will I automatically get a tax rebate from last year?
Yes and no. If HMRC think you overpaid (or underpaid!) tax last year, they will usually send you P800 Tax Calculation at some point between July and November.
However, it is important to note that HMRC’s calculations are only as good as the information held on their system. We have come across countless instances where employers have reported incorrect pay and tax details to HMRC.
HMRC expect you to inform them of any errors on your record, so be sure to check your end of year P60’s and P45′s to ensure you have paid the right amount of tax.
Tip: 3 ways to get a rebate!
HMRC do not automatically give you all of the tax allowances which may be available to you – you have to claim them. Here are 3 little-known allowances that could result in £1000′s back in your pocket!
- Uniform laundry allowance – If you wear a uniform to work which contains your company logo, you can claim extra tax back to cover the laundry costs.
- Professional fees and subscriptions – If you pay fees to certain professional or regulatory bodies (e.g. RCN, NMC etc), you may be able to claim tax back on your annual fees.
- Mileage allowance - if you meet the criteria, you may be able to claim up to 45p per mile if you need to use your own car for work. The rules are quite complex so do contact us for expert advice.
Will I only start getting taxed once I earn over £11,500?
Not necessarily. Your tax-free personal allowance is spread out evenly over the year. The logic behind this is to ensure you pay a consistent amount of tax each week/month.
Therefore, you will start paying tax as soon as you earn over the weekly or monthly allowance.
For example, if you earn £1,200 in April, you will pay 20% on £242 of your salary (£1200 less £958 allowance). So, as you can see, despite not having earned anywhere near £11,500 yet, you will still pay tax.
If you start working part-way through the tax year, any unused allowance from previous months is carried forward.
If you stop working part-way through the year and earned less than £11,500, you will be able to claim a tax rebate of any tax paid.
I have a question about my tax code
You can contact HMRC on 0300 200 3300. Or, feel free to comment below and we’ll do our best to help!