What does the tax code 522L/1 mean?

I'm on tax code ''547T'' what does that mean? Plus lots more tax questions!?

• I have just started a new job and the tax office has told me my new code will be 547T...What does this mean? So far this year I have only earnt £2000 as I was working overseas for a UK company and got paid overseas living allowance which didn't get taxed...hence earning so little!!!! On this I have paid £400 tax which I am due to get back. I have sent all my P45s from 2008 off and been told correctly that I owe £70 in underpaid tax, but since they owe me I am not too bothered, when and how does this come out of my salary? I have read that T means I am being inspected? This is confusing as I work it out to be £70 as do they so don't know why I'm being inspected!! At first they wrongly told me I owed £170 including tax they paid back to me from 2007 thinking it was 2008 (duhhh) so I am wondering if this letter was issued when they were looking into this being incorrect. Two more things, I am now due around £1100 per month, on this particular tax code how much tax will I pay? I also get free Bupa health care, does this come under ''medical insurance''? as it says ion the HM revenue site that I need to let them know, does this mean I pay more tax?

• Answer:

  Several issues here. This is likely to be an essay! Code 547L means that in a tax year (period 6th April to 5th April) you can earn £5479 before paying tax. Normally the personal allowance is £6475, but the shortfall may be to collect your underpayment, or it may be a restriction because you are getting a benefit in employment, BUPA. I don't have enough information to know why your underpayment is not being set off from your overpayment, but that may be because of what tax years are involved. I would expect you to get a computation to show any over/underpayment. There should be a note on that to tell you how any underpayment will be collected. Normally your code number is restricted for a later tax year to collect tax due. Say you have an underpayment in 2008/2009. The computation will be done sometime in the tax year 2009/2010, and any underpayment collected by a code number restriction in the year 2010/2011. The T suffix only means that tax office don't want your employer to amend your code number in accordance with any budget uprates, not that there will be any more for a while. It is probably because of your potential underpayment, and only means that tax office staff look manually at your code number if any changes are generally afoot as announced by the Government. It is of no major significance to you. You can check likely tax deductions on http://www.listentotaxman.com , but that doesn't show any in-year computation, and monthly deductions for tax may be affected, depending on your pay and tax figures as shown on form P45 when leaving last job. Monthly NIC deductions will be accurate. Your employer should notify HMRC that you are geting a BUPA benefit. Yes, that is a benefit in employment that comes under "medical insurance" and I'm afraid you are taxed on it. Your code number is restricted by amount of benefit. It means tax allowance is put at benefit first, and balance of allowance goes to your main pay.