2017/2018 Tax Codes

Your tax code will change at the beginning of the new tax year, 6th April 2017, because the Personal Allowance amount is being raised.

This is good news for most and means that you can earn more money before you have to start paying income tax.

2017/2018 personal allowance

The personal allowance amount is increasing to £11,500 and is applied across the board to every taxpayer, regardless of their birth date.

2017/2018 tax code is 1150L

So, during 2017-18, you will need to earn over £11,500 before you pay any income tax.

Who does this affect?

This affects employers, pension providers and all income tax payers paying tax through the PAYE system.

What knock on effects does this have?

This changes the basic and higher rates of income tax for the 2017/2018 tax year as follows:

2016-17 tax year 2017-18 tax year
Personal Allowance £11,000 £11,500
Basic Rate limit £32,000 £33,500
Higher rate threshold £43,000 £45,000

2017/2018 tax code Example:

Your taxable income = £34,000

Your Personal Allowance = £11,500

£34,000 – £11,500 = £22,500

You pay 20% tax on £22,500

When does the 1150L code get used?

The first day of the new tax year which is the 6th April 2017.

Who tells my employer about my tax code?

The tax office will send your employer or other income source an electronic message telling them what tax code to use. The tax code is then applied by the payroll department to your income automatically.

How does this affect my tax code?

Your 2017/2018 tax code is 1150L. It was 1100L (2016-17) and will be different because it reflects the higher Personal Allowance figure. You will notice this on your payslips from April 2017.

Is everyone’s tax code the same?

Not necessarily, some taxpayers will have a different code because they have different working circumstances, such as:

  • You are making up for a tax shortfall from last year’s tax payments.
  • You have a taxable company benefit like a company car.
  • You have multiple PAYE income streams or jobs for example pension income.

Checking your 2017-18 tax code

It is your job to make sure that your tax code is correct and it really is important. If your tax code is wrong then you are paying either too much, or too little tax.

Some taxpayers get a break down of how HMRC have comprised their tax code. This is called a P2 ‘Notice of Coding’. This can help you check if you have the right tax code.

If you think there has been a mistake and you have been issued with the wrong tax code, then you need to contact HMRC as soon as possible.

How Tax Rebate Services can help

When checking your tax code it’s an ideal time to see if you are entitled to a tax rebate. Our service has helped thousands of UK tax payers to identify and claim back income tax rebates you may be owed.

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