What is the new 1275L tax code?
New tax codes were issued out to workers across the country this April, following the start of the new tax year.
The 1275L code was distributed to people employed full time, part-time, or receiving a private pension. It will be used by your employer to determine the correct amount of tax-free income you can receive in the tax year.
Breakdown of the tax codes
Each tax code will typically begin with a number and end with a letter.
The number in your tax code can be multiplied by 10 to calculate what exactly you can earn tax-free for the year.
The letter in your tax code will refer to your situation and the effects it will have on your Personal Allowance, which is the amount you can earn tax-free each tax year.
L is the most typical tax code that entitles you to the standard tax-free Personal Allowance.
M/N is the tax code used for Marriage Allowance to allocate 10% of your Personal Allowance to or from your partner.
T is the tax code used to include other calculations for determining your Personal Allowance.
For more information on the breakdown of each letter in the tax code directly from the gov.uk website, click here: https://www.gov.uk/tax-codes
Am I on the right tax code?
Depending on whether you are on the right tax code will save you money and possibly refund you any money you paid in unnecessary taxes.
If you are unsure about your tax code, you can visit the gov.uk website to find out more when you click here: https://www.gov.uk/check-income-tax-current-year
Other ways of finding can be through your employer, who is entitled to provide you a payslip containing your tax code.
Why was the tax code changed?
The change happened at the start of the new tax year on April 6th 2021 and will run till April 5 2022. Standard tax codes changed from 1250L to 1275L as the Personal Allowance increased to £12,570 for basic-rate taxpayers.
Additionally, at the beginning of the month, the changes to IR35 regulations were introduced and now require those working as self-employed in the private sector to declare the correct amount of tax.
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