tax code 503L?

Question

Thanks for that all, but this is my first job and i have been here 2 years so they are the ones who issued my P60

I dont claim expenses and i'm not claiming benifits either.

My finance manager seems to think its a normal code for me. i just dont understand these things... im only 18 x

Answer 1

1. Add a 9 onto the end of your tax code. This is normal it means you can earn £97 per week (5039 divided by 52 week in year) or £419.92 per month before you pay tax (5039 divided by 12). It is normal. The only way you can get your allowance increased is if you claim for any tax relief on anything such as subscriptions etc.
The important thing to remember with tax though is every time you are paid your pay in that tax year to date is added up (including previous employers pay) and tax is calculated at that point in the year to date. Any tax already paid in that year to date is taken off and you pay the remaining in that month/week pay. I would suggest going on a free BST (business support team) HMRC course if you wish to know more as it is too much for me to explain here but you are free to email me if you want to give me specific figures and i can teach you how to check them. I have included the link below to HMRC website which shows your tax code is normal.

Answer 2

This is a higher tax code than normal.

As was said before. This means that you will be taxed on any income earned above £5030.00

This can be for a number of reasons. An emergency tax code, if you are working and your employers do not yet have your P45. Or it is not yet processed.

As a result of certain expenses claimed in a previous year. Expenses that are deemed by the government as taxable. Your tax code is adjusted to collect those taxes.

Benefits. Some companies give you perks on top of your wages, and some of these are considered taxable by the government (Company car for example).

Answer 3

503L is the normal PAYE tax code for 2006-07 tax year. The tax year runs from 6 April to 5 April. Last year it was 489L.

503L is derived from the personal allowance for this year of £5,035, the last digit being dropped.

Your tax code is amended automatically every year according to changes in personal allowances which are announced by the government in advance in a pre-budget report each November. The real Budget is held in March, the last being on 22 March 2006.

Depending on your job, it is possible that you may have expenses for which you can claim tax relief. These must be incurred "wholly, exclusively and necessary" for your occupation and should be claimed every year. Speak to your employer if in any doubt.

Finally, below is a link to an extremely informative leaflet 'P3' entitled "Understanding Your Tax Code" issued by the Inland Revenue (HM Revenue & Customs).

http://www.hmrc.gov.uk/leaflets/p3.htm

Although it is the 2005 edition (2005-06), if you read it in conjunction with the numbers I gave up top, ostensibly nothing has changed. Hard copies can be obtained from any tax office.

Answer 4

If you are given the code 503L this means that you are entitled to the ordinary personal allowance for 2006-2007 of £5,035 (the code number always leaves out the final digit, so 503 means 5,035). L refers to the normal personal allowance.

Emergency codes are sometimes called a ‘week one’ basis. The PAYE code looks like this: ‘503L Wk1’. Emergency codes treat each month on its own. They give you an equal amount of tax free pay every month. They do not take into account changes in your income or coding which may have happened earlier in the year. This means that your tax position may not be exactly right at the end of the year. Emergency codes protect you from big changes in your take-home pay.

Answer 5

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Additional Details

1 day ago
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Answer 6

Your are allowed to earn £5030 before the tax man taxes you. The God help you on the rest of your salary.

Answer 7

You are allowed to earn £5030 before paying tax

Answer 8

It is an emergency tax code, you probably haven't provided your employer with your P45 or P60.

Answer 9

You are allowed to take 'home' £5030 over the financial year, anything over that you pay tax on.

Answer 10

http://www.hmrc.gov.uk/helpsheets/p9x.pdf

It's an emergency code, the above link explains