Explaining Tax Codes for Doctors
You would be surprised how often the tax codes are wrong
The amount of tax deducted from a doctor’s salary is based on their tax code. If the tax code operated is wrong the amount of tax deducted by the employer will be wrong. This can lead to the doctor overpaying or under paying tax.
Why can my tax code be wrong?
Salaried GPs tax codes are often wrong for two main reasons:
- Doctors move jobs much more often than other people. This makes it difficult for payroll departments to operate the right tax code.
- Tax codes often don’t take account of the doctor’s personal expenses, non medical income or perhaps the fact that the doctor has more than one source of employment and/or self employment.
Having the wrong tax code is always a bad idea
Having the wrong code leads to you either paying too much tax, or paying too little. Both of these are a bad idea because if you pay too little then, in the end, HMRC will coming knocking on your door.
Pay too much tax and you will have to go through the process claim a refund, but also risk running out of time because you can only go back over the last 4 years.
Many people assume, often wrongly, that the employer will know best what tax code to use. In the end it is your responsibility to ensure the code is correct, which of course is where we can help you.
Whatever the reason for the incorrect code, we are able to check the doctor’s tax code at any time during the tax year. We can talk directly to the revenue to ensure that the correct tax code is being operated. This will ensure that the right amount of tax is paid and no unexpected tax bills arise at the end of the tax year.