compnay car tax/income tax

mb_2001uk

I am hoping someone can set me straight

I currently work an a sales manager and started my new job mid last year.

I currently get 31k per year with 5.5k in commision, which is paid at around march of the following year.
i also have a company car which is worth 8k per year benefit in kind. and costs me 150/year @ 20% tax (i think)

My previous company have come to me and offered me a new job which pays 35k/yr (an increase from 28k the lat time i worked there in aug 07)
They are also offering a bonus scheme of 4k per year
Also i would have a company car with the above.

So really my questions are if i went for the other job would i be really any better off as would i pay 40% tax on my car??????

Last tax year to april 08 i only earned 28k plus benefit in kind.

Can someone advise what they think

thanks

kitty1801

mb_2001uk wrote: »

I am hoping someone can set me straight

I currently work an a sales manager and started my new job mid last year.

I currently get 31k per year with 5.5k in commision, which is paid at around march of the following year.
i also have a company car which is worth 8k per year benefit in kind. and costs me 150/year @ 20% tax (i think)

My previous company have come to me and offered me a new job which pays 35k/yr (an increase from 28k the lat time i worked there in aug 07)
They are also offering a bonus scheme of 4k per year
Also i would have a company car with the above.

So really my questions are if i went for the other job would i be really any better off as would i pay 40% tax on my car??????

Last tax year to april 08 i only earned 28k plus benefit in kind.

Can someone advise what they think

thanks

You will be paying tax at 40% if your total income (pay + benefits) exceeds £41,435.

Your first job pays you 31,000 + 5,500 + 8,000 = 44,500 so you are already paying at the 40% rate band.

Your other job would pay you 35,000 + 4,000 + 8,000 = 47,000

So the extra you would have (after tax - don't know about NI) would be £2,500 x 40% = £1500 pa or £125/month

mb_2001uk

how does it work though, do i get taxed an average tax amount each month?
or say in feb I get to the limit above and get hit by the 40% for the rest of the year ( sorry if sounding a little thick)
I have never earned over 28K i a tax year and how do they know how much i am going to earn this year

kitty1801

If you are paid monthly, your allowances are split over the twelve months in the tax year so each month you would have £452.90 tax free and £3000 at 20%. Anything above this is taxed at 40%. If in any month(s) you do not take advantage of the full tax free or 20% rate band, it is 'rolled forward' to the following month to be used.

If you are paid your lump sum in March, your employer is doing you a big favour as that is the last month in the tax year and all your unused 20% rate bank can be used to offset the bonus before paying 40%. If they were to hang off and pay you in April (month1 of the tax year), you would only have one month worth of tax free & 20% banding so you would pay the majority at higher rate and spend the rest of the year getting a partial refund each month.

Hope that makes sense!

mb_2001uk

i have just got my wage slip out and
salary 2583.34
PAYE 491.80
NI 234.34

so this means only paying 20% right

kitty1801

Yes, you are paying 20% tax but looks like you are paying for employer benefits of £970pa. What was the £8000 you stated for?

mb_2001uk

thats what i should be paying maybe its beacuse my employer messed up my P11D and i have not been taxed as much for my car last tax year.
Does that mean my wage will go down soon?

mb_2001uk

Thats my health insurance actually

kitty1801

In that case you aren't paying anything towards your company car. Have you got a copy of your tax code to hand to check that?

If you car is not shown, you need to contact your tax office to give them the details of your car - make & model, list price, CO2 emissions, engine size, date car first registered, when you got the car and whether you pay anything back to your employer for the car.

mb_2001uk

tax code 148L does that mean anything, i did tell them but better do it agin you think

kitty1801

Are you claiming any expenses? A tax code of 148L means you have an overall deduction of £3955 - nowhere near the £8000 car benefit.

You should have a copy of your coding notice from HMRC advising you how the code has been worked out. Is your company car really worth £8000 in benefit? It would have to be a fairly expensive gas guzzler to cost you that much benefit.