Tax question ?

MadMan-JaMeS · 3 Feb 2011 at 14:25

Hey guys,

How much tax and NI would i pay on a sum of £400 ?

I am getting a loan from my employers of £400 but need to know how much i'd actually get of that after tax and NI.
thanks

Morba · 3 Feb 2011 at 14:26

Loan?

Greebo · 3 Feb 2011 at 14:27

Loan is zero tax and NI. However if you don't repay it with interest and you earn over £8,500 it should be declared on your P11D and you will be taxed on the interest not charged.

MadMan-JaMeS · 3 Feb 2011 at 14:37

see that is what i thought but apparently cos it'll go on my wage slip i need to be charged tax and NI

Greebo · 3 Feb 2011 at 14:40

It's not a loan then. Unless they mean it's going on the net pay and not the gross pay on your wage slip?

Do they expect you to pay back £400 then? As you will have lost over £100 of it with tax and NI. :confused:

MadMan-JaMeS · 3 Feb 2011 at 14:54

Greebo said:
It's not a loan then. Unless they mean it's going on the net pay and not the gross pay on your wage slip?

Do they expect you to pay back £400 then? As you will have lost over £100 of it with tax and NI.

Apparently so, i thought that myself, i would get about £300 but have to pay back £400 dnt make sense, and they are giving it me from the petty cash aswell

Greebo · 3 Feb 2011 at 14:56

You need to point out that it's not to go on the payslip then. We sometimes lend money to employees and either get them to sign that it's a loan from petty cash and take the money back in installments from their net wages or sometimes put it stright into their account and on the payslip but entered as a non taxable, non NI amount.

They only other possibility is how are you going to be paying it back? If in installments they might be taking the installments from your gross wages so it "should" even itself out once it's all paid back.

However, there is no point the company doing that and making more work from themselves.

MadMan-JaMeS · 3 Feb 2011 at 15:06

they did say installments, for my next 6 pay days.

Best bit is they are only lending it to me because they won't pay me the overtime hours they owe me till september and me and my missus need it for our new place.

VFM Addict · 3 Feb 2011 at 15:10

Provided that they recoup what they lent you by actually paying you (£400) less in the first place over the next six pay days rather than take it out of your pay after tax and NI, then you lose nothing.

Mr Jack · 3 Feb 2011 at 15:13

MadMan-JaMeS said:
see that is what i thought but apparently cos it'll go on my wage slip i need to be charged tax and NI

Are they giving you a loan? Or an advance on your wages?

MadMan-JaMeS · 3 Feb 2011 at 15:16

loan they won't advance me cos they wouldn't advance anybody else

Mr Jack · 3 Feb 2011 at 15:24

MadMan-JaMeS said:
loan they won't advance me cos they wouldn't advance anybody else

There should be no tax/ni on a loan. You wouldn't pay tax on a car loan, it shouldn't make any difference that it's from your employer.

Morba · 3 Feb 2011 at 15:44

why are they paying you in september for hours already owed to you?

Loony-Luke · 3 Feb 2011 at 15:48

zero tax but have to repay it with interest, how much interest depends on the person giving you the loan I guess.

MadMan-JaMeS · 3 Feb 2011 at 16:09

Morba said:
why are they paying you in september for hours already owed to you?

Cos the are unbelievably gay.

From July to July any overtime we work is accrued and then payed to us in september, no idea why they do this they just do lol If i leave tomorrow they will pay it to me as they have to same as any holiday hours accrued but not taken.

I got 66 overtime hours roughly since july 10 to a week ago, but because a lot of people ask to be paid it early they said no. However my area manager decided the reason i wanted it was a good one so arranged for a company loan of the same amount to be lent me. But now they telling me i need to pay NI & Tax on this loan.

Tomorrow i am going in to get it so will be talking to the HR officer dealing with it and explaining how i shouldn't pay Tax & NI.

Morba · 3 Feb 2011 at 16:10

That is shocking!

MadMan-JaMeS · 3 Feb 2011 at 16:33

Morba said:
That is shocking!

Yupp i can't see the logic behind myself, no matter when they pay the overtime they don't lose or gain anything.

Only thing i can imagine is, if someone has accrued say 100 overtime hours over a 6month period they can make u take 100 hours off paid over the next 6 months to even things out.

They send out a report every 3 months to let you know where you are at etc etc, but when i got mine in october they tried making me take time off to get rid of the overtime so i told them to stick it

Kemik · 3 Feb 2011 at 16:55

Greebo said:
Loan is zero tax and NI. However if you don't repay it with interest and you earn over £8,500 it should be declared on your P11D and you will be taxed on the interest not charged.

If it's a loan it's tax free as it's less than £5,000.

Vonhelmet · 3 Feb 2011 at 17:22

Kemik said:
If it's a loan it's tax free as it's less than £5,000.

Confirmed.

House · 3 Feb 2011 at 17:27

I did 66 hrs of OT last month and as always it got paid at the end of the month as it should.
Of course the tax man grabs 41% of it straight away but id rather pay the tax on my earning than have no earnings so what can you do.

If they banked up all my yearly OT for a whole year i'd geta massive chunk of money at the end of the year and i guess the compnay could hold that cash for upto 12 months and improve there cash flow but i doubt many people would be happy other than our CFO.

I guess what im saying is holding your employees OT in a bank is a pretty sucky practice. Is this a small company?