Help, being robbed by the tax man! Income tax query

Max_Headroom_3

Earlier this year and in full money saving mode, I downgraded my company car significantly in order to cut the huge amount of company car tax I was paying (cheaper car, much lower emissions so much lower taxable benefit).

It worked superbly, and my first wage slip in May using the new tax code my new super economical car entitled me to showed a nice big increase in take home pay.

In June I got a small (bi annual) bonus so it wasn't representative of a typical month (although I seemed to pay a lot of tax, but put that down to their computer predicting the bonus as a monthly pay rise and that affecting how they taxed me thinking that was the new income, ie much higher proportion at 40%). I assumed that when my pay came back to normal my monthly tax would come back to normal, plus a slight advantage to me due to the bigger hit in June.

Then my tax code changed very slightly due to a small change in taxable benefits, upshot being I would be taxed on an extra £303/year, which at 40% (I just break into the 40% band with taxable benefits) is £120/year in tax so expected to pay an extra £10 a month.

Just got wage slip for July (showing new code) and my take home pay is a whopping £203 lower than May due to extra tax (ie they've taken £203 more in July than they did in May).

I need to phone them tomorrow but wondered if anyone could shed any light before I do so. Depressingly I'm sure it is right as it always tends to be no matter how unfair it seems, (and if so then there is no point wasting the time and cost of a call), but I just cannot understand how it can be the case in this instance.

Two months, same income, tax code change to charge me an extra £10/month, nett result of being charged £203 more in tax.

Can anyone shed any light? :huh:

CLAPTON

tax is all about detail

if you wish to post the details of your payslips then it will be possible to explain the tax changes

chrisbur

As advised by CLAPTON to give a definite answer full details of your payslips are needed, but I think the most likely explanation is that your code was changed in your May payment which I assume was your second month for this tax year. Assuming that your code was cumulative the reduction in tax would be backdated to the start of the tax year, so giving you a lower tax figure for that month. This would be a combination of your extra tax allowance (two months for April and May) and also some 40% tax paid in April now only being due at 20%.

It is proberbly not that June and July tax figures are high but that May is low.

Max_Headroom_3

Hmmm... that sounds depressingly likely. To be fair, the current figure is more where I expected it to be after changing the car, it's just after changing it and then getting May's figure I was somewhat pleased to find it better than expected, only for it now to slip back (considerably).

What other information would I need to give?

mrposhman

Your best bet is to work out exactly what you think you should have paid out in tax so far this year.

I did this and figured I was being taxed correctly though because I was given a bonus and PAYE is calculated cumulatively I have been taxed heavily for the first part of the year. This will be refunded to me in the next few months.

I would work out your cumulative taxable pay and calculate your tax, if its what it says in your payslip, they;ve taxed you fine and its all been a catch up exercise.

CLAPTON

if you only want to know you have been taxed correctly in your last (july) salary then post up

month or month number
gross to date
taxable to date
tax to date
taxcode
salary this month
pension contribution this month
tax this month

However if you want to know how your salry varied through out the period then you need to post up those figure for each month

gratefulone

Hi. Am new to the forum and unsure if this is the right place to ask this so please re-direct me if I'm wrong. Am a basic rate taxpayer on a low income who is affected quite severely by the recent abolition of the 10% tax banding in the budget. There was rumour that the extra tax was to be re-paid to low income earners via the tax credit system but when I asked the tax credit office about this they said they knew nothing about this. Can anyone help/guide me please before I try to ring the tax office? Thanks.

jem16

gratefulone wrote: »

Hi. Am new to the forum and unsure if this is the right place to ask this so please re-direct me if I'm wrong. Am a basic rate taxpayer on a low income who is affected quite severely by the recent abolition of the 10% tax banding in the budget. There was rumour that the extra tax was to be re-paid to low income earners via the tax credit system but when I asked the tax credit office about this they said they knew nothing about this. Can anyone help/guide me please before I try to ring the tax office? Thanks.

The chancellor announced that the personal allowance would rise from £5435 to £6035 but not till September. Your first wage slip after then should see a refund of £60 and from then on you should be paying less tax.

gratefulone

jem16 wrote: »

The chancellor announced that the personal allowance would rise from £5435 to £6035 but not till September. Your first wage slip after then should see a refund of £60 and from then on you should be paying less tax.

Many, many thanks jem16 for your swift reply - I'm most grateful. Look forward to the refund and reduced tax in the Autumn.


:T :T :T :beer:

Sully316

If you pm me all the details i can work out if this is right, for this you would need your payslips, and i would need copies of your notice of coding change you should have received.

dobbie82

there is a fre paye calculator here:

http://www.listentotaxman.com/index.php?calc=1&year=2007&age=0&add=0&taxcode=&period=1&ingr=40000&Submit=Calculate

the tax should adjust itself over the year

But also should it not be your payroll department/accountant etc that you should talk to as it is them that deduct from your wages and pay it to the government. Maybe they have a numpty working for them who cant work out tax tables.