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Tax code 0tw1
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# 1
mumsonline
Old 19-01-2013, 9:08 AM
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Default Tax code 0tw1

My son has just received his very first wage. They have used tax code 0tw1 and deducted tax. We weren't expecting for him to pay tax straight away as thought he'd have to earn a certin amount first.
Is this correct?
Thanks
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# 2
Poetry
Old 19-01-2013, 9:33 AM
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It just means he hasn't gotten any allowances as they don't know his employment history e.g. if he had a second job and they put him on a full code he could end up underpaying. Did he fill in a P46 when he started work? My brother tried to phone HMRC when this happened to him but his job wasn't even on their system at the time so they couldn't do anything. He got in touch with the companys payroll and they sorted it all out for him, he got the tax back in his next pay.
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# 3
jem16
Old 19-01-2013, 9:58 AM
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Quote:
Originally Posted by mumsonline View Post
Is this correct?
Thanks
It is correct if he has not handed in a P45 (unlikely if its his very first wage) or completed a P46.

Basically he should have been given a P46 to complete by his employer.
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# 4
nomunnofun
Old 19-01-2013, 12:36 PM
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If he did not hand in a P45, code BR on a week 1 basis is appropriate, not 0T. BR taxes everything at 20%, even if earnings are 50k. 0T (zero T) will tax at 20% up to the basic rate band and apply higher rates thereafter.
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# 5
McKneff
Old 19-01-2013, 1:02 PM
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Once his tax code is sorted he will receive a refund through the payroll.

To clarify also.

Tax allowance over the year is 8105. This is spread out over the year.

So divide 8105 by 52 and any money earned over the figure you get then he will pay 20% tax on.

If this is his first job, he may not pay tax at all until April because he may not have used up all his allowance.

NI is also payable at 12% if he is earning over a certain amount.

Tell him not to worry, he will get it back as soon as his tax code is sorted.
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# 6
mumsonline
Old 19-01-2013, 2:06 PM
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Thanks for the replies!

He hasn't filled in any P45/46 forms so we I'll just wait for it to sort itself out.
Unfortunately 16 year olds don't have much patience when it comes to money.
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# 7
McKneff
Old 19-01-2013, 2:42 PM
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You could download a P46 and he could give his employer it when he next goes into work.

Or he could ask his employer for a p46 to fill in when he goes to work.

Don't wait for it to sort itself out. He will end up paying tax till April and then end up having to reclaim the whole lot directly through HMRC.

Much easier to sort it now and its a good life lesson for him.
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# 8
McKneff
Old 19-01-2013, 2:43 PM
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show him this thread, he will at least know how the tax system is set up.
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# 9
chrisbur
Old 19-01-2013, 3:37 PM
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Quote:
Originally Posted by nomunnofun View Post
If he did not hand in a P45, code BR on a week 1 basis is appropriate, not 0T. BR taxes everything at 20%, even if earnings are 50k. 0T (zero T) will tax at 20% up to the basic rate band and apply higher rates thereafter.
The tax code OT non-cumulative is the tax code employers are now required to use if no P45 is handed in and the employee declines to complete a P46, it was changed start of this tax year or last forget which. This code reduces the likelyhood of a high earner being undertaxed which can happen with a BR code.
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# 10
nomunnofun
Old 19-01-2013, 4:33 PM
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Quote:
Originally Posted by chrisbur View Post
The tax code OT non-cumulative is the tax code employers are now required to use if no P45 is handed in and the employee declines to complete a P46, it was changed start of this tax year or last forget which. This code reduces the likelyhood of a high earner being undertaxed which can happen with a BR code.

Thank you - I was not aware of this change.
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