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| *Ostroff, Fair and Company>>>United Kingdom Taxes |
Tax code changed from 489L to BR, what does it mean in terms of whether it will increase or decrease tax paid? |
Can anyone clarify what is 489L and what is BR? BR is basic rate - it means that you will pay tax at the basic rate of 22% on all taxable income. It is also known as the emergency tax code. If you have changed jobs recently you need to provide your new employer with your P45 from your previous employment as this will let your current employer know how much tax & NICs you paid in your previous job and lets them tax you at the correct rate rather than 22%. 489L is the standard allowance for a person under the age of 65 for the tax year 6 April 2005 - 5 April 2006, it basically means that the first 拢4,895 employment income that you receive is not taxed and the subsequent 拢2,090 is taxed at 10%, ie on the first 拢6,985 income you would only pay 拢209 tax. Any earnings between 拢6,986 to 拢37,295 is taxed at 22% and above 拢37,296 is taxed at 40%. This does not take into account any savings or dividend income which are taxed at 20% and 10 or 32.5% respectively. When your employer receives your tax coding they will normally apply a rate of tax from a special table meaning that your tax for the full year on your salary will be worked out and then you will pay the same amount of tax in each payment period. oh dear. BR means basic rate so u will be paying the highest level of tax until ur tax code is confirmed.489L is the normal tax we all pay if we are under a certain amount of money earned BR means you will be paying tax at 22%, the Basic Rate, more than you would have being paying on 489L. Under 489L you would have a tax free personal allowance of 拢4895, then the first 拢2090 above the personal allowance would have been taxed at 10%, and anything above 拢2090 would have been taxed at 22%. If you have paid too much tax though you can claim it back by getting a form from your local inland revenue office and filling it in and returning it with your relevant payslips and/or your P60. They will also be able to give you some advice as to how to get it changed back to the correct code. for more info: http://www.direct.gov.uk/moneytaxandbene... |
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