As we come to the end of the 2011-2012 tax year many people will find their tax code will change along with the increase in tax free or tax deductible allowances. These include personal allowance and married couple’s allowance. Personal allowance, for the under 65s will increase in 2012-2013 by £630, from £7,475 to £8,105. If you earn less than this amount you won’t pay any tax.
Employers and pension providers use tax codes to work out how much tax should be deducted from your earnings or pension. Your employee tax code should be updated before the first payday of the new tax year. HMRC usually sends details of the required changes to your employer but you can check your new code on their website.
If your tax code is incorrect you should notify HMRC immediately as you may be eligible for a refund. Having the wrong code may mean you either over-pay or under-pay your taxes. There are time-limits on reclaiming tax which can be found on the HMRC website.
Self-employed people can claim tax back on many business costs such as insurance, advertising, safety equipment, phone charges and stationary. But be aware of your dates, all tax relief for tax year 2007-2008 must be claimed by 5 April 2012.
Published on 27/04/2012 © Listentotaxman.