Emergency Tax Rate.

Pete.Dakota · 29 Jun 2011 at 14:37

I've just started a new job. I haven't been getting a salary since the start of this current tax year. I was was unable to get my new employer my P45 and instead filled out a P46. I have two questions:

1. Will I be given an emergency tax code until my employer gets my P45?

2. As I haven't earned this tax year, will I be taxed at all? Even if I'm on an emergency rate?

Greebo · 29 Jun 2011 at 14:42

1. Yes. It will be 747L W1/M1 if this is your only or main job.

2. You will be taxed as it ignores what you may or may not have earned this year hence the week 1/month 1 tag. It taxes you based on your earnings for that week/month.

However, I am confused. If you haven;t earned anything so far this year then you will not have a P45 for the current year so your current employer will leave you on emergency tax code for the rest of this year and any tax due back you won;t get until next year from the Inland Revenue.

Morba · 29 Jun 2011 at 14:42

You will be taxed with BR most likely

Greebo · 29 Jun 2011 at 14:42

Morba said:
You will be taxed with BR.

No he won't, don;t scare him

Morba · 29 Jun 2011 at 14:43

Greebo said:
No he won't, don;t scare him

Why not? It's what's happened to me on 3 separate occasions.

Greebo · 29 Jun 2011 at 14:57

Morba said:
Why not? It's what's happened to me on 3 separate occasions.

After you have completed a P46 saying it's your only and main job? If so then the payroll deprtments where you worked have got it wrong and a quick phonecall would fix it every time.

Pete.Dakota · 29 Jun 2011 at 15:15

Greebo said:
1. Yes. It will be 747L W1/M1 if this is your only or main job.

2. You will be taxed as it ignores what you may or may not have earned this year hence the week 1/month 1 tag. It taxes you based on your earnings for that week/month.

However, I am confused. If you haven;t earned anything so far this year then you will not have a P45 for the current year so your current employer will leave you on emergency tax code for the rest of this year and any tax due back you won;t get until next year from the Inland Revenue.

I had been claiming some benefits in the mean time. The Job Center couldn't get me my P45 in time. I just meant I hadn't earned a salary. I have since sent my P45 to my new employer, but not in time for the first month's payroll.

How is emergency tax calculated? I've read that it's 22%, but is that after the tax I would pay if my weekly/monthly earnings while on an emergency code are extrapolated up to a year? I seem to remember paying emergency tax years ago and it worked out at something like 45%.

Morba · 29 Jun 2011 at 15:19

Greebo said:
After you have completed a P46 saying it's your only and main job? If so then the payroll deprtments where you worked have got it wrong and a quick phonecall would fix it every time.

First month after giving p46 was another BR month. Every time.

Deep · 29 Jun 2011 at 15:19

Greebo said:
No he won't, don;t scare him

It happened to me, but as you said one 10 minute phone call sorted it all out.
Now I play the waiting game

Greebo · 29 Jun 2011 at 16:03

Pete.Dakota said:
I had been claiming some benefits in the mean time. The Job Center couldn't get me my P45 in time. I just meant I hadn't earned a salary. I have since sent my P45 to my new employer, but not in time for the first month's payroll.

How is emergency tax calculated? I've read that it's 22%, but is that after the tax I would pay if my weekly/monthly earnings while on an emergency code are extrapolated up to a year? I seem to remember paying emergency tax years ago and it worked out at something like 45%.

In that case, each week you will get 1/52th of your annual tax free allowance so your first £143.83 is tax free and the next chunk of money will be taxed at 20%

Put your figures in here if you want to find the exact take home

http://listentotaxman.com/index.php

Once they process your p45 from the benefits office you'll get a refund through your wages.

Greebo · 29 Jun 2011 at 16:03

Morba said:
First month after giving p46 was another BR month. Every time.

Crap payroll departments then.

Jono · 29 Jun 2011 at 17:12

Greebo said:
Crap payroll departments then.

Crap, overcomplicated tax system.

Stumble Bum · 29 Jun 2011 at 17:32

Jono said:
Crap, overcomplicated tax system.

because you could come up with a better system, I am sure....

The tax system itself is great and works very well.

Pete.Dakota · 30 Jun 2011 at 22:00

Greebo said:
In that case, each week you will get 1/52th of your annual tax free allowance so your first £143.83 is tax free and the next chunk of money will be taxed at 20%

Put your figures in here if you want to find the exact take home

http://listentotaxman.com/index.php

Once they process your p45 from the benefits office you'll get a refund through your wages.

Sorry I'm still confused. I remember emergency tax being WAY more than what I would normally pay in tax, and the refund I got being quite substantial. But 20% is pretty low, right? So has something changed recently with regards to emergency tax?

I'm not sure what you mean by my 'next chunk of money'. Do you mean I'll get the 1/52nd of my allowance as my pay? Going my understanding I wouldn't even be owed a rebate as the 20% is less than I would normally pay, this is why I'm confused.

Kemik · 30 Jun 2011 at 22:02

Pete.Dakota said:
Sorry I'm still confused. I remember emergency tax being WAY more than what I would normally pay in tax, and the refund I got being quite substantial. But 20% is pretty low, right? So has something changed recently with regards to emergency tax?

I'm not sure what you mean by my 'next chunk of money'. Do you mean I'll get the 1/52nd of my allowance as my pay? Going my understanding I wouldn't even be owed a rebate as the 20% is less than I would normally pay, this is why I'm confused.

BR = Basic rate. They take a flat 20% rather than 20% after your personal allowance.

Hairybudda · 30 Jun 2011 at 22:04

You'll be treated as being at the first week at the beginning of the tax year until your p45 is processed, it's a week 1 code. Tax is cumulative over the year so it's self correcting, next months wages will correct any overpayments/underpayments.

[edit]
i may or may not be wrong, it's been years since i touched payroll

Pete.Dakota · 30 Jun 2011 at 22:12

Kemik said:
BR = Basic rate. They take a flat 20% rather than 20% after your personal allowance.

OK, that explains why I remember it being so high. So I should be expecting to pay BR for the first month, then? And my employer will balance everything out in my second month's payroll, meaning I won't have to claim back from the HMRC?

Kemik · 30 Jun 2011 at 22:15

Pete.Dakota said:
OK, that explains why I remember it being so high. So I should be expecting to pay BR for the first month, then? And my employer will balance everything out in my second month's payroll, meaning I won't have to claim back from the HMRC?

When your employer receives your tax code then yes, it should sort itself out. I'd still check at the end of the tax year though.