First job, 11 weeks in, haven't paid income tax :S

Peddeh wrote: »

Hi there,

I started my first job on the 25/07/17, after having finished university the month prior (I hope for this job to be temporary until I find something better, and in between applying for graduate roles), so I'm now 11 weeks into the job.

I'm paid at a rate of £8 per hour, at 37.5hours each week, paid weekly (£300 before tax), which I've received every week except my first week, where I only completed 30hours, having started on the Tuesday.

My first pay slip, I was paid £240 before tax, and received £226.44 after paying £9.96 in NI and £3.60 in Income Tax. My second pay slip refunded me the £3.60 and instead I paid just £17.16 in NI, receiving £286.44. All my payslips since then have been £17.16 in NI and £0 in Income Tax.

Why am I not being income taxed? Several colleagues that I've spoken to are either being income taxed or aren't.. there isn't any consistency.

Edit: my tax code is 1150L and some of my colleagues are on the same tax code, who are paying income tax

Your tax code is being applied on a cumulative basis, that means that each week into the tax year you are given 1/52 of your yearly tax allowance before tax is deducted. You will now be up to week 27 of the tax year so 27/52 of your tax allowance is £5976.18 Assuming you are paid currently you will have earned £3240 at this point. Your earnings are less than your tax allowance so no tax is due.

Your tax allowance will increase by £221.34 each week and your earnings if they stay the same by £300 when your earnings are more than your tax allowance you start to pay tax. In your case though the tax year will end before that happens.

A new tax year will start and on week 1 of that £300 earnings will get £221.34 allowance which gives £78 to pay tax on so £15.60 tax. Usually the tax allowance goes up for the new tax year so actual tax figure will probably be a bit lower but this shows how the tax system works.

You say that "there isn't any consistency" In fact if you apply this system to each case you will find that they all follow this pattern when on a cumulative tax code. Each will have a tax code which gives a tax allowance which is compared to their earnings to see what if any tax is due.

Often at the start of employment you are given an emergency tax code which usually only looks at each week in isolation so in your case you paid some tax, when the cumulative code was issued this tax was given back to you as it was not due.

My figures assume that you have had no taxable income before starting this job.

Peddeh wrote: »

That's right, prior to this I've never had a taxable income, unless a student loan counts.

Student loan is not taxable income so as advised on the figures available no tax this tax year, tax will start first payday on or after 6 April.