Can anyone please give me some info on this or let me know where I can get some information?
I have a mock exam and the employee is 4 weeks into smp, she has a tax code of K104. If her pay was to drop from £275 a week then what would the amount be by which her tax liability would be limited? Im a bit confused. Its the year 2009/2010.
thanks , i did read that when researching K codes on HMRC , the manuals I am studying dont really go into depth on this, just wondered if anyone else had any information or had trouble with this question.
If your deductions (untaxed income on which tax is still due) are more than your allowances you'll be given a K code, to ensure you pay tax on the excess. Whereas with other tax codes the number indicates the amount of income you can have tax-free, the number in a K code multiplied by ten broadly indicates how much must be added to your taxable income to take account of the excess untaxed income you received.
The main aim of a K code is to collect tax on:
benefits in kind
state benefits
underpayments of tax
When a K code is operated, your tax deduction for each pay period cannot be more than half of your gross pay or pension. Your employer or pension provider restricts the amount of tax deducted using a K code to make sure that you retain a certain amount of take home pay or pension. If more tax is due it will be collected at a later date.
yeah thanks, I did a bit of research on the cd rom for 2009-2010 and understand it now. I hadnt really done alot on this through the course so threw me a bit when read the question.
