Tax & Allowance?

Soldato
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So I got my first paycheque of the new tax year today....turns out I was taxed.

The way I understand the system is that for my first couple of paycheques, when my earnings for the year have been less than the personal allowance (£5035 for the tax year 06-07), I do not get taxed. Only when I hit that mark does my income get taxed, does it not?

Or does it not work like that? Can anyone help me shed some light on this :confused:
 
Soldato
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I believe you have to claim the tax back at the end of the financial year, it seems to be the case for me anyway as I'm also paying tax, and did from when i started working last year.
 
Soldato
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If the amount you get paid that month is more than your limit / 12 you get taxed. You can of course claim it back later on if it turns out you've paid too much tax.
 
Soldato
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Phil99 said:
If the amount you get paid that month is more than your limit / 12 you get taxed. You can of course claim it back later on if it turns out you've paid too much tax.

Oh, so I need to do 5k/12, and that's my allowance per month?
 
Don
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Ex-RoNiN said:
So I got my first paycheque of the new tax year today....turns out I was taxed.

The way I understand the system is that for my first couple of paycheques, when my earnings for the year have been less than the personal allowance (£5035 for the tax year 06-07), I do not get taxed. Only when I hit that mark does my income get taxed, does it not?

Or does it not work like that? Can anyone help me shed some light on this :confused:

each month an estimate/forecast of yearly earnings is made divided by 12 and then allowances based on this

if you earn £4000 min month one then the projected is £48,000 so proportional limits for 22 and 40 will be used , if in month 2 you earn £1000 then the projected will be £30,000 so this will then be used and any overpayment from month 1 refunded etc
 
Associate
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Manchester Uk
And you don't normally need to claim it. The inland revenue are now quite good at just sending you the cheques. I've had two in the last few years, where redundacies have resulted me in no hitting the tax limit, and me being posted a rebate.
 
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branddaly said:
The inland revenue are now quite good at just sending you the cheques.

They are now also called HM Revenue & Customs since the Inland Revenue and Customs & Excise merged last year.

As has been said, the tax system works over the whole year.

It is possible that you have been put on a week/month1 code (also known as the emergency code) which means that each monthly paypacket will get 1 twelfth of your allowances and rate bands, and each month will be dealt with on it's own, rather than the year as a whole. if this is the case your tax code will have an X after it, wor Wk/Mth1 or similar. If it has, contact your HMRC office and ask what you need to do to be put onto a cumulative code.
 
Associate
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Also there's a form you can fill in if you know you're not going to be earning more than the allowance in the tax year so you don't get taxed. But probably more of use to students.
 
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Johnny Girth said:
Also there's a form you can fill in if you know you're not going to be earning more than the allowance in the tax year so you don't get taxed. But probably more of use to students.

The P38(s). As you say, intended for students who will only work during the holidays, but will be working full time. So, for the period they work, it looks like they would be earning more than the personal allowance if they continued for the whole year. As they won't, this form allows the employer to not deduct tax for the period they are working.

If your job is permanent though (i.e not just holidays) then being on the correct cumulative code is the better option.
 
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