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Tax Code - Zero Personal Allowance (0T)

LuckyReds
LuckyReds Posts: 5,866
edited April 2016 in Not Sports Related
Just found a HMRC letter on my doormat dated January 2016.. presumably one of my charming neighbours took it in by accident, has cleaned out their house today and found it. Apparently my tax code for April 2016 - 2017, so the newly began tax year - is 0T: I have a personal allowance of £0, and I certainly don't earn enough to have anything less than the usual personal allowance. I receive(d) no perks other than my PAYE salary too.

Obviously I'll be giving them a ring tomorrow, but does anyone else know why they would've done this for a brand new tax year (when, clearly I haven't touched my personal allowance) and how difficult it's going to be to get them to fix it? A bit confusing as I'm getting my own company off the ground at the moment, and would like my personal affairs to be pretty simple!

Comments

  • LenGlover
    LenGlover Posts: 31,656
    Could be any number of things.

    BUT: Have you recently changed jobs without a P45?

    That can sometimes explain it
  • LuckyReds
    LuckyReds Posts: 5,866
    edited April 2016
    LenGlover said:

    Could be any number of things.

    BUT: Have you recently changed jobs without a P45?

    That can sometimes explain it

    I did change jobs during the last tax year, and my P45 was delayed in the post from my old employer - so that's a good shout.

    Although would the 0T tax code follow me on into this tax year?

    Edit: Actually, Jan's payslip says 1060L - so I did have a normal tax code at the time the letter was sent out.
  • LenGlover
    LenGlover Posts: 31,656
    LuckyReds said:

    LenGlover said:

    Could be any number of things.

    BUT: Have you recently changed jobs without a P45?

    That can sometimes explain it

    I did change jobs during the last tax year, and my P45 was delayed in the post from my old employer - so that's a good shout.

    Although would the 0T tax code follow me on into this tax year?
    Quite possibly in the absence of further information. The computer churning the notices out won't know the reason for what's on them right or wrong.
  • LuckyReds
    LuckyReds Posts: 5,866
    LenGlover said:

    LuckyReds said:

    LenGlover said:

    Could be any number of things.

    BUT: Have you recently changed jobs without a P45?

    That can sometimes explain it

    I did change jobs during the last tax year, and my P45 was delayed in the post from my old employer - so that's a good shout.

    Although would the 0T tax code follow me on into this tax year?
    Quite possibly in the absence of further information. The computer churning the notices out won't know the reason for what's on them right or wrong.
    Cheers for the help mate! Hopefully it's a relatively simple hiccup - I think I'm more annoyed that one of my neighbours may have been sitting on this letter since January. I'm sure a quick ring to HMRC will help sort it out tomorrow... maybe.

    It's just totally confused me, as I edited above - as of Jan (when this letter was sent out) I had a normal tax code.
  • LenGlover
    LenGlover Posts: 31,656
    LuckyReds said:

    LenGlover said:

    LuckyReds said:

    LenGlover said:

    Could be any number of things.

    BUT: Have you recently changed jobs without a P45?

    That can sometimes explain it

    I did change jobs during the last tax year, and my P45 was delayed in the post from my old employer - so that's a good shout.

    Although would the 0T tax code follow me on into this tax year?
    Quite possibly in the absence of further information. The computer churning the notices out won't know the reason for what's on them right or wrong.
    Cheers for the help mate! Hopefully it's a relatively simple hiccup - I think I'm more annoyed that one of my neighbours may have been sitting on this letter since January. I'm sure a quick ring to HMRC will help sort it out tomorrow... maybe.

    It's just totally confused me, as I edited above - as of Jan (when this letter was sent out) I had a normal tax code.
    Do you have any benefits? Company Car, Private Health etc that might not have been declared on your P11D by your former employer?

    If yes they might be trying to get back underpaid tax.

  • soapy_jones
    soapy_jones Posts: 21,355
    I know you will be champing at the bit to get it sorted tomorrow but I called HMRC on Saturday morning just after 9.30 to query a coupe of things with self assessment last year and PAYE tax code for this year and was amazed I was done and dusted in 10 minutes straight through no waiting

    I am so blown away with that I still have not yet managed to regain my punctuation skills
  • IA
    IA Posts: 6,103
    0T is most commonly (in my experience) a sign that HMRC think you have two or more jobs. This may be due to delays in your previous employer processing your P45 or (more likely) delays within HMRC. They implemented RTI before they were ready for it and are still catching up.

    A call to HMRC should cover it, but you may be hit in April. Any changes should backdate to the start of the tax year so you'll get it back in May
  • JorgeCosta
    JorgeCosta Posts: 1,035
    HMRC do some random things in my experience. I have had 4 tax codes this year - the first two of which I understand. The third was an error by HMRC as they somehow managed to massively confuse the amount that I had paid into my private pension with what I am currently drawing from it ie nothing. This resulted in me owing tens of thousands of pounds in tax! When I contacted them they put their hands up and put me on another code (which is still in their favour). The upshot is that they now owe me several thousands of pounds in over payments. This pisses me off because I have had to scrimp and save over the last few months.
  • LuckyReds
    LuckyReds Posts: 5,866
    LenGlover said:

    LuckyReds said:

    LenGlover said:

    LuckyReds said:

    LenGlover said:

    Could be any number of things.

    BUT: Have you recently changed jobs without a P45?

    That can sometimes explain it

    I did change jobs during the last tax year, and my P45 was delayed in the post from my old employer - so that's a good shout.

    Although would the 0T tax code follow me on into this tax year?
    Quite possibly in the absence of further information. The computer churning the notices out won't know the reason for what's on them right or wrong.
    Cheers for the help mate! Hopefully it's a relatively simple hiccup - I think I'm more annoyed that one of my neighbours may have been sitting on this letter since January. I'm sure a quick ring to HMRC will help sort it out tomorrow... maybe.

    It's just totally confused me, as I edited above - as of Jan (when this letter was sent out) I had a normal tax code.
    Do you have any benefits? Company Car, Private Health etc that might not have been declared on your P11D by your former employer?

    If yes they might be trying to get back underpaid tax.

    Nope! I'm not aware of any benefits I've had in the year - I had the other of Private Health 2 years ago but forewent it due to pre-existing conditions.

    Back of the envelope calculations show I should be owed money, if anything. I spent 6 months of 15/16 working at one salary, then 4 months working at a slightly higher one.
    soapy_jones said:

    I know you will be champing at the bit to get it sorted tomorrow but I called HMRC on Saturday morning just after 9.30 to query a coupe of things with self assessment last year and PAYE tax code for this year and was amazed I was done and dusted in 10 minutes straight through no waiting

    I am so blown away with that I still have not yet managed to regain my punctuation skills

    That's the last thing I expected to hear to be honest, so that makes a pleasant surprise! Fingers crossed I'll get the same service.
  • LuckyReds
    LuckyReds Posts: 5,866
    IA said:

    0T is most commonly (in my experience) a sign that HMRC think you have two or more jobs. This may be due to delays in your previous employer processing your P45 or (more likely) delays within HMRC. They implemented RTI before they were ready for it and are still catching up.

    A call to HMRC should cover it, but you may be hit in April. Any changes should backdate to the start of the tax year so you'll get it back in May

    That's a pain. The problem is - April is my final pay cheque as a PAYE employee; it's pretty much looking as though I'll be contracting and doing my own stuff from next month. Hence why I'm a bit miffed that I've discovered this letter 3 days before my final pay cheque!
    JorgeCosta said:

    HMRC do some random things in my experience. I have had 4 tax codes this year - the first two of which I understand. The third was an error by HMRC as they somehow managed to massively confuse the amount that I had paid into my private pension with what I am currently drawing from it ie nothing. This resulted in me owing tens of thousands of pounds in tax! When I contacted them they put their hands up and put me on another code (which is still in their favour). The upshot is that they now owe me several thousands of pounds in over payments. This pisses me off because I have had to scrimp and save over the last few months.

    Sounds like an absolute nightmare, glad to hear it's getting rectified now though. How quick if they have been to respond to you and make appropriate changes out of interest?
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  • JorgeCosta
    JorgeCosta Posts: 1,035
    Actually they were mercifully very quick to sort out the biggest error - fair play to them for that. But they do still owe me a lot of money which I don't suppose that I will get for a few more months.

    If you are fairly simple PAYE they are okay. I've had two employments for a number of years, one as a company director, and never had any problems but this year my pension contributions seem to have triggered something erroneous.
  • killerandflash
    killerandflash Posts: 69,853
    IA said:

    0T is most commonly (in my experience) a sign that HMRC think you have two or more jobs. This may be due to delays in your previous employer processing your P45 or (more likely) delays within HMRC. They implemented RTI before they were ready for it and are still catching up.

    A call to HMRC should cover it, but you may be hit in April. Any changes should backdate to the start of the tax year so you'll get it back in May

    That sounds right to me. Your "other job" has been give your tax allowance for 2016/17
    soapy_jones said:

    I know you will be champing at the bit to get it sorted tomorrow but I called HMRC on Saturday morning just after 9.30 to query a coupe of things with self assessment last year and PAYE tax code for this year and was amazed I was done and dusted in 10 minutes straight through no waiting

    I am so blown away with that I still have not yet managed to regain my punctuation skills

    Are you sure that was HMRC you spoke to, it wasn't just some random person you managed to get through to :smile:
  • GreenWithEnvy
    GreenWithEnvy Posts: 1,843
    Exactly the same thing happened to me. My old employment ended on 31st December and I started a new job on 1st Feb. Whilst my first salary went through as normal my second one was on the 0T code, and I was taxed like a mofo.

    I rang up HMRC and it was because of a delay in seeing my P45 from the old job i.e. the thought I had two jobs. It was resolved quickly and my pay is now taxed at the correct rate, but when I will see a rebate I don't know just yet,
  • Addickted
    Addickted Posts: 19,456
    This sort of thing never happens if you bank in the BVI.
  • IA
    IA Posts: 6,103
    GreenWithEnvy said:

    Exactly the same thing happened to me. My old employment ended on 31st December and I started a new job on 1st Feb. Whilst my first salary went through as normal my second one was on the 0T code, and I was taxed like a mofo.

    I rang up HMRC and it was because of a delay in seeing my P45 from the old job i.e. the thought I had two jobs. It was resolved quickly and my pay is now taxed at the correct rate, but when I will see a rebate I don't know just yet,

    That's a nightmare for it to happen in the last month of the year.

    I saw this every month when I used to work on the payroll of a medium sized company. We'd have about 20 new hires every month and at least 10 of them would be put on zero personal allowance in their second month. Most would get 0T or BR (20% tax on all earnings for the year), but some would get D0 or D1 (40% or 45% tax on all income).

    I was able to call people at the time and get them on to HMRC before the pay was done, or call HMRC about the extreme cases, but in other companies the people doing the payroll won't have the time or inclination.
  • LuckyReds
    LuckyReds Posts: 5,866
    edited April 2016
    Shockingly my experiences echo @soapy_jones - Monday morning at 08:50 and I was done by 09:00. Spoke to a really cheery young lady, who was pretty friendly and even made a few light-hearted comments.

    She said there were no notes on my account and it was a mystery... and then sounded a bit confused and asked me my salary. Turns out they incorrectly had £133,000 down. (For what it's worth, even if someone passed my salary around the office on a scrap of paper, there's no way you could get that number from scruffy hand-writing or even mishearing.)

    Must say, I'm quite impressed with the HMRC Personal Tax Account online too - if I had had that to begin with I could've spotted the error myself. That said - a bit depressing to see I'll be 68 when I can retire.. and it's bound to go up again in the next 45 years! Too much for a Monday morning.
  • johnnyhumphrey
    johnnyhumphrey Posts: 449
    I check for clients,and have corrected,dozens of incorrect PAYE codes each tax year--HMRC are,to say the least,cavalier in their approach to issuing them.Most times they will just issue a code that includes extraneous restrictions ie all the entries on the latest P11D they received even where some of those items are then claimed as tax allowable by the taxpayer in their self-assessment return.They allocate allowances randomly and do their best to issue a code totally in HMRC's favour.Please don't think of HMRC as an efficient or competent service.Their attitude is check your code and if it's wrong let us know rather than taking care to issue a correct code in the beginning.It's all your fault---sound familiar?

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