Tax code changes; three words that promise a thought provoking, inspiring, and captivating blog. OK, I exaggerated. However, as one of two certainties in life, it’s certainly worth knowing your tax.
As announced in the Budget 2014, Personal Allowance has increased. Put simply, this means, for those born after 05/04/1948, the amount you can earn before paying income tax has risen from £9,440 to £10,000.
This increase is reflected in your tax code; from 06/04/2014 the code 944L will become 1000L. Multiplied by 10, the number relates to the total amount of income you can earn in a year before paying tax. The letter relates the amount of tax due and is based on factors such as total income and date of birth. ‘L’ is applied to people born after 05/04/1948 and eligible for the basic Personal Allowance.
For more on tax codes and how they apply to you, all the information you need is on the HMRC website. Awareness in this area means you’ll be able to spot if you or your employee’s are on the wrong tax code, which could result in paying more than necessary.