Tax question

[the-norseman]

Hi all,

I had a GOV email last night that my tax code has changed so I've logged in this morning to find yep it has changed to 961TX

I'm a 40% tax payer, have been for a number of years as base salary is over 55k, I also get private medical insurance and a railpass which are both taxable and I've had them for about 3 years.

This year I've been on a training course for 10 days and during that I have claimed back Breakfast, Evening Meals and Fuel (fuel for a hire car). The tax code change seems to be based on me receiving payments for these claim backs, is that correct?

I'm PAYE been with the company 15 years, never had any issues with not paying tax until last year where I underpayed by £77 apparently, account for 2025-2026 is showing they reckon I will underpay again.

[trickywoo]

I think it’s most likely because of the previous underpayment.

I guess you know the 961 means your personal allowance has been reduced to £9,610.

[Countdown]

the-norseman said:

Hi all,

I had a GOV email last night that my tax code has changed so I've logged in this morning to find yep it has changed to 961TX

I'm a 40% tax payer, have been for a number of years as base salary is over 55k, I also get private medical insurance and a railpass which are both taxable and I've had them for about 3 years.

This year I've been on a training course for 10 days and during that I have claimed back Breakfast, Evening Meals and Fuel (fuel for a hire car). The tax code change seems to be based on me receiving payments for these claim backs, is that correct?

I'm PAYE been with the company 15 years, never had any issues with not paying tax until last year where I underpayed by £77 apparently, account for 2025-2026 is showing they reckon I will underpay again.

Highly unlikely that they changed the tax code as a result of those payments Assuming the reimbursements were via your payslip then the payments should have been paid as "non taxable" (expenses reimbursements arent taxed for obvious reasons). HMRC would accept that at face value.

A tax code of 961TX suggests that they're collecting additional tax of £1,181 which doesn't really tie back to the £77 underpayment either.

Do you submit a tax return?

[the-norseman]

Nope all PAYE, the payments are made as bacs direct to my account.

[Countdown]

the-norseman said:

Nope all PAYE, the payments are made as bacs direct to my account.

It doesn't make any difference but were they paid via your payslip or as a separate payment?

Even if it was a separate payment it wouldn't make any difference to your tax code until after the end of the tax Year when your company submits it's P11d which reports any taxable benefits you received. Expenses are not "taxable benefits"

When you say you attended a course "this year" was it before or after April ?

[ro250]

Countdown said:

A tax code of 961TX suggests that they're collecting additional tax of £1,181 which doesn't really tie back to the £77 underpayment either.

I know it's a dumb question but for a 40% tax payer, how do you work out how much additional tax they are taking from the tax code?

[Countdown]

ro250 said:

Countdown said:

A tax code of 961TX suggests that they're collecting additional tax of £1,181 which doesn't really tie back to the £77 underpayment either.

I know it's a dumb question but for a 40% tax payer, how do you work out how much additional tax they are taking from the tax code?

The amount of tax-free allowance the OP is losing is £12,570 - £9,610 = £2,960. This was previously tax-free it's now going to be taxed at 40% (which is £1184)

[the-norseman]

Countdown said:

It doesn't make any difference but were they paid via your payslip or as a separate payment?

Even if it was a separate payment it wouldn't make any difference to your tax code until after the end of the tax Year when your company submits it's P11d which reports any taxable benefits you received. Expenses are not "taxable benefits"

When you say you attended a course "this year" was it before or after April ?

The course has been spread 2 days Jan, 2 days March, 2 days April etc.

Payments aren't on any payslips.

Just checked my P11D and its simply my medical and railpass.

[the-norseman]

This is from the GOV website when I login:

Why your tax code has changed
We changed this because:

you now get job expenses worth £312 --- these are the expenses that have been paid directly back to me
you now get medical insurance worth £615
you now get employer provided services worth £226 -railpass
you have underpaid £77 from a previous year
we estimate you have underpaid £204 tax this year

[ro250]

Countdown said:

ro250 said:

Countdown said:

A tax code of 961TX suggests that they're collecting additional tax of £1,181 which doesn't really tie back to the £77 underpayment either.

I know it's a dumb question but for a 40% tax payer, how do you work out how much additional tax they are taking from the tax code?

The amount of tax-free allowance the OP is losing is £12,570 - £9,610 = £2,960. This was previously tax-free it's now going to be taxed at 40% (which is £1184)

Thanks!

[Countdown]

the-norseman said:

This is from the GOV website when I login:

Why your tax code has changed
We changed this because:

you now get job expenses worth £312 --- these are the expenses that have been paid directly back to me
you now get medical insurance worth £615
you now get employer provided services worth £226 -railpass
you have underpaid £77 from a previous year
we estimate you have underpaid £204 tax this year

This is somewhat confusing.

if the expenses didn't appear on your P11d I'm not sure why it would affect the tax code.
Your medical insurance and railpass WOULD affect your tax code but did you only start getting them during 2024/25? If you were getting them already then your tax code should already have been amended to reflect this.
I've no idea how they can say that you've underpaid tax for this year considering you're still paying it

If I was to take a wild guess I'd suggest that they have assumed your medical insurance, rail pass and expenses from last year were all taxable AND you'll get the same again this year) but even then, the adjustment to your tax code would only be £2,306.....

Given that you're 100% PAYE you could try speaking to your payroll team or your Head of Finance

[the-norseman]

I've emailed HR but they are a pain in the rear to deal with. The railpass and medical insurance I've had for about 4 years now.

So yeh confused really.