Latest news with #taxcode
The Sun
3 days ago
- Business
- The Sun
HMRC warning to check codes on letters as workers are owed £700 each – check if you're affected
BRITS are being urged to check their tax codes immediately as thousands could be due a £700 refund from HMRC. It comes as the May 31 deadline has passed for employers to issue P60 forms – a crucial document that confirms how much tax you've paid in the last financial year. 1 But tax experts are warning that many workers could be on the wrong tax code without even knowing it, potentially costing them hundreds of pounds. One in three Brits has been on the wrong tax code at some point, with average overpayments hitting a hefty £689, according to research by Canada Life. The blunder means HMRC could be sitting on billions in overpaid tax and the only way to get it back is to check your details and flag it. Taxpayers should double check the 'final tax code' on their P60 that's the string of letters and numbers near the top of the form. Codes like "BR", "D0", or "D1" should raise a red flag. These mean you may have been taxed at a flat rate with no tax-free allowance. Anyone who stayed with the same employer up to April 5 should have already received their P60, either in the post or digitally. And while it may be tempting to toss it aside, it's an important piece of paperwork. Not only is it used to claim tax rebates, it's also essential for applying for tax credits, benefits, loans, or even a mortgage. If you think your code is wrong, or if something doesn't look right on your payslip, it's time to act. How to check your tax code You can check your current tax code by logging into your personal tax account online, using the HMRC app, or digging out your latest payslip. You may also have received a Tax Code Notice from HMRC in the post, so it's worth checking any recent letters too. If the numbers don't add up, contact HMRC directly. You can call them on 0300 200 3300 or write to: Pay As You Earn and Self Assessment, HMRC, BX9 1AS. Those who've overpaid could see a refund land in their bank within five days once their claim is processed or receive a cheque in the post within two weeks. But it's not always good news, some may find they underpaid tax and owe HMRC money. If that's the case, most will be asked to repay it gradually over 12 months. If you're owed money, you may also receive a P800 letter or a simple assessment telling you how much you're due and how to claim it. There's a four-year limit on claiming back overpaid tax, so if you think you've been overcharged, don't delay. Whether you're a full-time employee, working multiple jobs, or have just switched roles, it's worth double checking your code because a five-minute check could leave you hundreds better off. The Sun has approached HMRC for comment.
New York Times
26-05-2025
- Business
- New York Times
House Bill Takes Aim at Tax Break for Sports Owners
Tucked in the domestic policy bill advanced by House Republicans last week is a change to the tax code that could potentially cool the current frenzy among the very wealthy to own professional sports teams. For decades, owners of teams in the N.F.L., N.B.A. and other major leagues have been able to write off the entire value of their team's 'intangible assets,' which include player contracts, media rights and sponsorships, over 15 years. Under the House plan, team owners would be able to deduct from their taxes only half the value of those intangible assets over that period. The tax break, introduced two decades ago, can amount to hundreds of millions of dollars. Intangible assets make up the bulk of a team's worth, and because team values have been steadily rising, the tax breaks have as well. The tax break has turned teams into a kind of tax shelter and has helped fuel the lofty prices that investment firms and billionaires have paid for teams in recent years. While the provision in the House bill would not affect current owners, only future ones, it threatens to have a chilling effect across sports ownership. If demand for teams cools, current owners could be hurt because the value of their investments might not grow as quickly. The congressional Joint Committee on Taxation estimates that cutting the write-offs in half would raise $991 million in revenue over 10 years. Team owners insist the number is far higher, though almost all teams are privately held and do not disclose their financials. Leagues have been doing the math to determine how much the tax bill might hurt them. The prospect of the tax changes could spur sellers — or buyers — to move more quickly ahead of any changes being formalized, said Mark Weinstein, a partner at the law firm Hogan Lovells. N.F.L. owners, who met for two days in Eagan, Minn., last week, were briefed on the provision. According to team executives, the owners were encouraged to call senators in their home states to pressure them not to include a similar provision in the Senate version of the policy bill. One team president, who spoke on the condition of anonymity because he feared potential fallout from the president, said that the provision 'felt punitive.' President Trump, he and others said, wants leverage over the owners. The White House disputed that suggestion. A White House spokesman, Harrison Fields, said the tax measure was about eliminating an advantage for owners at a time when the price of attending sporting events is rising. 'The president is committed to ensuring that sports teams overcharging ticketholders do not receive favorable tax treatment,' Mr. Fields said in a statement. 'His focus is on fairness for fans, not team ownership.' It's unclear whether the provision was aimed at the N.F.L., which Mr. Trump has sparred with over many years, since it affects all major leagues. That could be by design, Mr. Weinstein said. 'If it was just the N.F.L., then it leads to the conclusion it is punitive, right? If it's all sports leagues, maybe there's some wiggle room,' Mr. Weinstein said. 'It's classic Trump, if you think about it, in that he might intend it to be punitive, but he presents it in a way — maybe it is, maybe it is not.' In recent years, Mr. Trump has battled over a number of issues with teams and athletes, including the N.B.A. stars LeBron James and Stephen Curry. But his relationship with the N.F.L. dates back to the 1980s when he began showing an interest in buying a team. Unable to land a franchise, he bought the New Jersey Generals of the United States Football League in 1984 and led an effort to sue the N.F.L. for trying to prevent the U.S.F.L., a spring league, from playing in the fall. The U.S.F.L. won, but was awarded three dollars in damages. The league soon folded. Over the years, Mr. Trump has chided the N.F.L. He played down the severity of concussions and in 2017, he urged owners to fire players who did not stand for the national anthem to protest racial injustice and police brutality. But Mr. Trump remains friendly with several owners, including Woody Johnson of the Jets and Jerry Jones of the Dallas Cowboys. In March, the Patriots owner Robert Kraft reached out to the president to broker a deal with Paul, Weiss, Rifkind, Wharton & Garrison, a law firm that represents the N.F.L. This year, the New Orleans Saints owner Gayle Benson invited Mr. Trump to the Super Bowl, and the title-winning Philadelphia Eagles visited the White House. Two weeks ago, Commissioner Roger Goodell and the Washington Commanders owner Josh Harris went to the Oval Office to announce that the N.F.L. draft would take place in Washington in 2027. Ultimately, Mr. Weinstein said that the allure of teams is so strong that wealthy investors would continue to buy teams, regardless of tax incentives. 'If you're a buyer and you've got that much wealth that you want to join the club, you're going to pay the price,'' he said.
The Sun
19-05-2025
- Business
- The Sun
Millions of workers urged to check key code on special payment slips arriving in DAYS – check if you're overpaying
MILLIONS of workers have been urged to check a key code on a special payment slip revealing if they're overpaying tax. The warning has been issued to employees who should receive their P60s before the end of the month. P60s are issued to workers at the end of every tax year with the final deadline for bosses to send them May 31. They are sent out either electronically or in paper form. However, one key detail on the P60 could tell you you're paying the wrong amount of tax - your "final tax code". If it turns out you are on the wrong code, it means you could be overpaying tax and are owed money from HMRC. Bear in mind though, you may also be underpaying tax and have to pay HMRC any shortfall. Sarah Coles, personal finance expert at Hargreaves Lansdown, said: "It isn't always easy to get to grips with your P60, but the thing to look for is the final tax code. "If it's wrong, you could end up over-paying or under-paying your tax – either of which is a pain in the neck." Your tax code could be wrong for any number of reasons, including if you have multiple jobs and your employer doesn't know your personal allowance has been used up from earnings elsewhere. You may also be on the wrong code if you've changed jobs and your employer hasn't received the right documentation from a previous employer. Or, someone in the HR department might simply have made a clerical error meaning you're on the wrong code. How to challenge your council tax band How to check your tax code A tax code is normally a five-digit mixture of letters and numbers. The most common tax code for the current tax year is 1257L. This tax code is used for most people with one job and no untaxed income, unpaid tax or taxable benefits (like a company car). You can check your tax code on your online personal tax account, via payslips, or on the HMRC app. You can also, if you've received one, check your code on a "Tax Code Notice" letter from HMRC. You'll need your Government Gateway ID and password to log in to your online personal tax account. If you don't have this you can use your National Insurance number or postcode and two of the following: a valid UK passport a UK photocard driving licence issued by the DVLA (or DVA in Northern Ireland) a payslip from the last three months or a P60 from your employer for the last tax year details of a tax credit claim if you have made one details from a Self Assessment tax return (in the last two years) if you made one information held on your credit record if you have one (such as loans, credit cards or mortgages) You can also use free tax code calculator which can give you a steer as to whether you're on the right one. How to report a wrong tax code If, after checking, you think you're on the wrong tax code, you can contact HMRC to tell them via phone on 0300 200 3300. This is usually the quickest way to get a response. Or, you can send a letter to the following address: Pay as You Earn and Self Assessment, HM Revenue and Customs, BX9 1AS, United Kingdom. If you are on the wrong tax code and have been paying too much, HMRC will change it so you pay the correct amount moving forwards. They should also reimburse any tax you've already overpaid. If you've been underpaying tax, you will usually have to pay the money back over 12 months. But, only if you are earning enough over the personal tax allowance (£12,570) to cover the underpayment and owe less than £3,000. HMRC might get in touch with you to tell you you're owed a tax rebate too - they'll do this via a P800 letter or a simple assessment letter in the post. But again, a P800 might tell you if you've not paid enough tax and have to pay it back. A P800 letter will tell you if you can claim online through the Government's website, in which case you'll need your Government Gateway ID and password. If you claim the money online it will be sent to your bank account within five days. You can also claim your refund through the HMRC app. If your P800 letter states you will be paid your tax rebate via cheque in the post, you should receive it within 14 days of the date on your letter. If you're owed tax from more than one year, you'll get a single cheque for the entire amount. There are time limits in place to reclaim any overpaid tax, which is currently four years from the end of the tax year in which you are trying to claim. So, if you're in any doubt you've overpaid tax, you should contact HMRC as early as possible. What your tax code means Your tax code is a combination of letters and numbers. The number will normally dictate the level of your tax-free allowance. So if your allowance is £11,000 the first four digits of your code will be 1100. The letters have different meanings - here is a guide: L - You're entitled to the standard tax-free personal allowance M - Marriage Allowance: you've received a transfer of 10 per cent of your partner's personal allowance (£1,260) N - Marriage Allowance: you've transferred 10 per cent of your personal allowance to your partner S - Your income or pension is taxed using the rates in Scotland T - Your tax code includes other calculations to work out your personal allowance, for example, it's been reduced because your estimated annual income is more than £100,000 0T - Your personal allowance (which is currently £12,570) has been used up, or you've started a new job and your employer doesn't have the details they need to give you a tax code BR - All your income from this job or pension is taxed at the basic rate (usually used if you've got more than one job or pension) D0 - All your income from this job or pension is taxed at the higher rate (usually used if you've got more than one job or pension) D1 - All your income from this job or pension is taxed at the additional rate (usually used if you've got more than one job or pension) NT - You're not paying any tax on this income Tax codes starting with K mean you have income that isn't being taxed another way and it's worth more than your tax-free allowance If your tax code begins with 'W1', 'M1' or 'X' you've been placed on an emergency tax code and may need to update your details. If you change jobs, take on an additional role or have another change in circumstances it is also worth checking your details and making sure you are on the correct code. It could be that HMRC has not received information about your change of circumstances and therefore will not update anything.
Washington Post
15-05-2025
- Business
- Washington Post
House GOP plan to raise child tax credit adds citizenship provisions
Republicans are pressing to boost the child tax credit — a bipartisan goal that would benefit more than 20 million households — in their bid to reshape the nation's tax code. But they've also attached provisions meant to cut off undocumented immigrants that would disqualify many U.S.-born children from the tax break and create complications for some married filers who are both citizens and usually file separately.
Forbes
09-05-2025
- Business
- Forbes
GOP Efforts To Downsize Trump's Tax Cuts Will Make Filing More Complicated
Restaurant server getty When policymakers' ambition to pass big tax cuts collides with the need to limit the cost, the inevitable loser is simplicity. People may get a tax cut, but they'll battle more paperwork to get it. Case in point: the struggles of congressional Republicans to downsize President Trump's many campaign tax promises. Congressional Republicans are straining to balance multiple, often-conflicting goals in a big 2025 tax bill. They want to extend the 2017 Tax Cuts and Jobs Act and enact some form of Trump's ideas such as tax-free tips and overtime. But while the House and Senate budget frameworks allow trillions of dollars in largely-unfunded tax cuts, open-ended versions of Trump's plans would exceed even those targets. To strike a balance, GOP leaders are exploring ways to limit the costs. But that means adding complexity to an already confusing tax code. The result may be that getting some of Trump's proposed tax breaks may depend on how much tax-favored income you earn, how much money you make overall, and even what you do for a living. Complexifying means more work for taxpayers and their paid preparers. More than that, people lose confidence in tax laws they can't understand. Adding complexity will be especially challenging given the number of IRS employees fired by the Trump Administration and the many who have resigned in recent months. And new regulations also could run afoul of a 2024 Supreme Court ruling that limits the ability of federal agencies to interpret the law. Nonetheless, lawmakers are forging ahead with less costly, but more complicated versions of Trump's campaign promises. For example, Trump wants to make tips tax free. While he's never said how, the Tax Policy Center estimates that exempting all tips from income tax would reduce federal revenue by $6.5 billion in 2025 alone. To lower the cost, Sen. Ted Cruz (R-TX) has introduced a limited version with multiple provisions that would make the law more complicated. For example: Lawmakers are doing the same with Trump's plan to exempt overtime from tax. As with tax-free tips idea, Trump has offered no details. However, the Yale Budget Lab estimated that one version could cost as much as $866 billion over 10 years To reduce that price tag, GOP lawmakers are exploring scaled-back, and presumably cheaper, versions. For example, Rep. Don Bacon (R-NE) has introduced a slimmed-down version of tax-free overtime that would allow workers to deduct OT pay, but only up to 20 percent of their other wages from the same employer. In addition, unmarried workers could take the deduction only if they make $100,000 or less in annual adjusted gross income while a married couple filing jointly would be eligible only if they make $200,000 or less. Because income cliffs like these generally are a bad idea (you get the full deduction if you make $100,000 but get nothing if you make $100,001), Congress likely would add some phase-outs to Bacon's bill. And that would make matters even more complicated. To limit gaming by workers who generally do not receive overtime pay, Bacon would use the Fair Labor Standard Act of 1938 definition of overtime. That might prevent some workers and their employers from recategorizing regular wages as overtime but it brings its own set of complexities. Another version, proposed by Senator Roger Marshall (R-KN) and others, is somewhat different. Instead of a wage limit, it would cap the deduction to $10,000 for unmarried taxpayers and $20,000 for couples. It includes income limits similar to Bacon's, but with phase-outs. Marshall's bill also creates its own definition of overtime which would require more new rules and inevitably exclude some workers from the tax break. Even with these limitations, lawmakers likely are looking at cutting taxes by roughly $4 trillion to $5 trillion over 10 years by extending the individual provisions of the 2017 Tax Cuts and Jobs Act, approving some version of Trump's proposals, and adding special interest provisions they'll need to win votes in the narrowly divided Congress. If Congress succeeds in shoehorning all these ideas into a single piece of legislation, some households will be happy to get a lower tax bill. But they may not be so pleased when they first have to sort through a complicated set of rules to figure out how much of a tax break they get. Or perhaps learn they are not eligible for the new tax benefits at all.
