Tax code and pay query.

[di30]

Hi Folks

Was talking to my mate earlier and her son's tax code is one of the common ones at 747L, so far he's earned up to 4865.90, but she is wondering if this means he should not be taxed until he earns that actual amount of 7475?

I always assumed this was the case, because she said he was confused and asking on how it works, as they now seem to be taxing his wages, first time this month he is monthly paid and due to be paid into his account tomorrow.

Any info for my mate will be great thank you.

[garlok]

Re: Tax code and pay query.

Hi Di,

Is it tax he is actually paying or is it National Insurance? I can't quite rememeber the figures without going to look them out but he may have reached the NI threshholds which of course are nothing to do with his tax coding. As far as I know you are correct in assuming that the number of the code allocated is the number of "tens" of pounds you can earn before tax kicks in.

One thing though is he getting any help from anywhere else at the moment like some of the benefits, training grants etc as they now get rolled in to income?

A few random thoughts.

regards
Garlok

[BBoo]

Re: Tax code and pay query.

Have you read this?

HM Revenue Customs: Tax codes - the basics

[di30]

Re: Tax code and pay query.

Hi Di,

Is it tax he is actually paying or is it National Insurance? I can't quite rememeber the figures without going to look them out but he may have reached the NI threshholds which of course are nothing to do with his tax coding. As far as I know you are correct in assuming that the number of the code allocated is the number of "tens" of pounds you can earn before tax kicks in.

One thing though is he getting any help from anywhere else at the moment like some of the benefits, training grants etc as they now get rolled in to income?

A few random thoughts.

regards
Garlok

Thank you Garlok

I have a copy of his payslip here, as his mum wanted me to ask on their behalf, he is paying NI as well as Tax.
Its just a basic payslip which just says Salary, showing the full gross pay and deductions of both as stated.

No other benefits, I just asked them over the phone now.

Thank you.

[di30]

Re: Tax code and pay query.

Have you read this?

HM Revenue Customs: Tax codes - the basics

Thank you for this.

His payslip shows 747L.

Cheers.

[Deepie]

Re: Tax code and pay query.

As he got a 2nd job elsewhere ?........

[jen_br]

Re: Tax code and pay query.

No he will get taxed the basic rate should he earn under his taxable allowance he will get a return.

[oscar]

Re: Tax code and pay query.

No he will get taxed the basic rate should he earn under his taxable allowance he will get a return.

But you might have to write to them come April (poss May) when they get the end of year P60 - tax office dont like giving the money back too often.

[di30]

Re: Tax code and pay query.

As he got a 2nd job elsewhere ?........

Hi

No, he started this job in July and is his only job 38 hours a week.

Cheers.

[di30]

Re: Tax code and pay query.

No he will get taxed the basic rate should he earn under his taxable allowance he will get a return.

Thanks Jen

Been going through his wage slips with his mum and as above, he started the full time job in July, and this is the first one he has been taxed on, he gets paid every last Friday of each month.

Cheers.

[di30]

Re: Tax code and pay query.

I have asked for permission from his mum to post details on here, but I have not scanned the slip just copying the details as shown.

I do know he was unemployed for over a year before starting this job in July 2011.

.................................................. .............................................

Salary 1166.67

Deductions

NI £67.76
PAYE £41.00
Student Loan £0.00

TO DATE
Taxable Pay £4865.90
TAX £41.00
Nat Ins £294.95


Pay date 31 Dec 2011
Tax code 747L

Total deductions £108.76
.................................................. ..................................................

(Not eligible to pay for Student loan at this point as earnings just under £15K).

[oscar]

Re: Tax code and pay query.

If he was unemployed for over a year, he should look into working tax credits.

[di30]

Re: Tax code and pay query.

If he was unemployed for over a year, he should look into working tax credits.

Thanks Oscar

I think her son is in his early 20's and still lives with his parents, well his mum anyway, so not sure if he is eligible or not, think you have to be 25 and over, will check on this though, cheers for that.

[Never-In-Doubt]

Re: Tax code and pay query.

going on that payslip it seems they've assessed his income and realised he will exceed the threshold therefore this was the first month of tax - basically if come April 6th he's still under the £7400 limit he can send a letter in with his P60 and they'll refund him in his next wage - it's all very simple really....

In the to date totals, tax shows £41 ergo this is his first month of tax based on the fact he's likely to earn more than £3000 in the next 4 months pay. so roughly £160 tax would have been paid, around £150 would be owed back. and my guess is they've done this as his current employer wasn't given the P45 from when he signed off so tax office doesn't know his pre-april earnings (ie dole money).

[garlok]

Re: Tax code and pay query.

Thats clarified it a bit more. I did my calculations based on him working for the whole of the tax year to date, i.e. from April. He has only worked from July and his employer will work directly from the tax tables, based on what has been said Week 39 or Month 9 and that will tell the employer to start deducting tax at the levels of salary he gets. As others have said it will probably be finally sorted at P60 time at the end of the tax year when overall levels of earnings are assessed fully.

He will probably like the rest of us be on self assessment and will have to fill in his own forms, (much of which is on-line now heaven help us all via Acrobat Reader X) but we found these last two years that the figures are all calculated as you go and you will know if you have any to pay or whether a refund is due. The first year we did this a small refund I think about 11 quid was owing to us and it was paid automatically into the bank. This year we had to pay about 50 quid extra and a bill arrived with a bank payslip.

He also won't have the complication of a P11D to consider either as I assume he gets no benefits in kind from his employer.

regards
Garlok