Help with tax code 543L

LipsMahoney

Greetings,

I recently moved from Canada to London with a German Passport to live/work.

I arrived in the UK on February 15, 2008 and began full-time employment on June 3rd. I'm paid based on an hourly wage, deposited into my bank account monthly, and receive no benefits (I'm considered a freelancer).

Now, oddly, my first paycheque was for approx. 2.5 weeks of full-time work (paid 1 week behind) and I was deducted absolutely £0 tax. My tax code is 543L and my NI code is A. NI was £25.66 and tax was £0. Can someone please explain to me why it is I was taxed nothing for this payslip? Does it have anything to do with not having worked in the UK previously?

Any help'd be greatly appreciated.

Best Regards,
PAS

Witsend_2

Hi and welcome:D now I'm no expert but add a 0 to your tax code and that is the amount that you are allowed to earn in any one year before you start to pay tax, ie £5,430.
I hope this helps.

arealbasketcase

Tax codes are cumulative, the 543L is shorthand for your allowance, basically you add a zero to any tax code and that is the amount you can earn each year without paying tax. On a monthly basis you are allowed to earn 1/12 of this before tax so by the end of June you would have accumulated 3/12 of your allowance i.e. unless you earned more than approx' £1358 in June then you would not exceed the tax free amount you would be entitled to earn upto the end of June.

National Insurance is not cumulative, it is too complicated to explain here but it based on upper and lower earnings limits PER month.

myrnahaz

If your first ever salary has cost you £25 in NI, then your gross salary for the 2.5 weeks was less than £300, which is well below arealbasketcase's calculation of £1358 tax-free allowance to date, which is why no tax was deducted.
I would just enjoy it while it lasts - rest assured that it'll sort itself out over the next few months or as your income increases.

chrisbur

If you paid 25.66 NI and you are paid monthly then your gross pay was about 338.00 for that month. If that was 2.5 weeks salary then you are on about 135.00 a week. I hope you are not working too many hours each week or they are paying you below the minimum wage.

As far as your tax is concerned on that amount you would not have paid any tax on a cumulative code or a month one code. Somewhere on your payslip will be a tax basis, usually next to the tax code.

As to what your tax situation should be, I have no idea. Have you been in touch with the tax office at all?

binnie

I'm also on that code as I'm sure many others are.
I thought I'd got away with paying no tax or no national insurance, but then this month, the Inland Revenue have taken almost 3 times the amount for not taking any for the last two months.

What I would like to know, and sorry if I have hijacked this thread, is what will I come out with after tax and insurance on £750 a month?
Thanks all

kscour

NI
http://www.hmrc.gov.uk/rates/nic.htm
£90 free per week (so x 52 / 12 for monthly rate)
11% of earnings after that is deducted for NI

tax
http://www.hmrc.gov.uk/rates/it.htm
£5435 per year tax free
20% of earnings after that for tax (until upper limit of £36,000)

So once you've established your normal tax and ni deductions, should you work overtime or have a pay rise, bonus etc. you will pay approx 1/3 of the extra amount in tax and NI

Roughly (don't quote me on this!)
on £750 per month
NI = £39.60
Tax = £59.42
http://www.hmrc.gov.uk/helpsheets/e12.pdf

binnie

Seems a bit steep on the National Insurance side, but will find out when I get paid, yikes, doesn't seem much to be left with

binnie

Just looked at the chart and it says 543L is emergency tax???

binnie

Me again, sorry.
Does anyone know the telphone number for the Inland revenue in Bury, Lancs, can't find it anywhere.

chrisbur

binnie wrote: »

Just looked at the chart and it says 543L is emergency tax???

Yes 543L is used as the emergency tax code but it is also the starting point for most peoples tax code. This is the basic under 65 tax allowance and if you have no other allowances or deductions then this is your tax code.