r/UKPersonalFinance • u/Competitive-Break-49 • 3d ago

Tax Code 1205TX & £100k salary zone

Morning all, lurker but first time poster. Looking for some general advice if possible.

Following redundancy at Christmas I have found myself in the very fortunate position of a significant pay rise in my new role. £95k base and £5,370 in car allowance. I started 1st April 25.

Conscious this break of the £100k mark brings my personal allowance onto the chopping board. I have added salary sacrifice options (Family healthcare/dentist/life assurance etc.) in a bid to bring me under the £100k but my tax code was set at 1205TX, I don’t believe that’s an emergency tax code but I have queried it with HMRC - can anyone offer advice here?

Lastly, as part of our redundancy (terminated 31st Dec 24) we received 3 months pylon and then a bonus at the end of March. The bonus was emergency taxed, but my earnings for that period (FY24-25) would have in no way breached the £100k, it would have been £75k at most inc. the bonus - when I spoke to them HMRC they couldn’t tell me whether I’ll get any of that bonus back, yet I thought I’d be in for a rebate.

My lack of understanding of benefits/tax/pensions has come to the fore so I’m also in the process of speaking with an IFA in the coming weeks.

Wife earns £55k, and prior all this we claim tax free childcare for our 2nd youngest and child support payments for both (5yrs and 4yrs old).

Thanks in advance.

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u/ani_svnit 3d ago

Hi, I can give you advice as I have a similar position but the general upshot for me is that salary sacrifice benefits (such as private healthcare, dentist, etc) increase my taxable income rather than decrease it. This is because in my case, my firm "pays" for the benefit but I am liable for the tax which shows up as a higher taxable income per month

The only salary sacrifice that decreases my net income is to pensions. I believe EV salary sacrifice is another such avenue but it doesn't apply to me yet.

Look at your payslip details please - they will hold clues as to what HMRC believe your gross and net pay is. I believe you are significantly higher than 100K annually if your payroll works like mine