What is the OT Tax Code?

The OT tax code describes that one can not utilize any tax-free personal allowance. One can end up paying income tax if one does not have a tax-free personal allowance. This is because your employer does not have the accurate details for giving a tax code. The standard Personal Allowance is the threshold up to which one does not have to pay any tax.  Your tax code determines how much money you must hand over to HRMC.

Why is the OT Tax Code Given?

One has started a new job and does not have a p45 form to give to your boss. One has used a personal tax-free allowance and still needs to complete a P46. One started a new job and was unable to give relevant information to get a tax code.

The OT tax code can be applied if your earnings surpass the basic rate tax and this tax code can be used in emergencies.

ot tax code

At times HRMC gives a temporary OT tax code. It is also necessarily accurate if one finds his or her payslip. The OT tax code does not provide any tax-free personal allowance because it is unique. Your whole income will be taxed from the first pound you earned. To minimize taxable income under the umbrella of the OT tax code you have to start paying tax.

How much tax will I pay on an OT tax code?

If you have a nice chunk of income and it is free of all types of taxes. Then under OT, every penny you earn must be in the tax system.

If you are earning £25000 per annum, you must be taxed £12430 and under the OT system, your entire £25000 gets taxed.

Will I get a tax rebate after being on an OT tax code?

Those who have the OT tax code and now wondering if there is a little tax treat in the form of a rebate waiting for you.

Undoubtedly the OT tax is like a friend and it ensures HRMC does not miss out on any tax.

In simple words, it means that you have paid more tax than you were bound to pay.

There is also a piece of good news

for you if you have overpaid tax under the OT code, HRMC will refund you automatically.

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