Income Tax - more paid in Sept

alflavor

Hi,

Can anyone advise me?

I am on tax code K280 (car+fuel) and am a 40% tax payer (by a few K, no more)

Since April I have had the same take home pay.

Sept payslip arrived, and is £120.00 less than previous.

Contacted HR today who in turn contacted our external Payroll operators, who said I had paid more tax this month as my tax code is a cumulative one.

Am I to expect this extra taken off each month? I thought the whole point of PAYE was to tax you fairly equally over the 12 month period?

I can't really afford a £150 drop in take-home 'just like that' but I couldn't get any further with my employers on the matter today, so if anyone has any advice?

Thanks,
Al

chrisbur

In September the point at which 40% tax is taken was lowered. This is so that anyone paying tax at 40% does not benefit from the increase in allowances that also came in to compensate for the loss of the 10% tax band. Without knowing your exact figures I cannot be certain but it looks like you have had the 40% band change applied but not the increase in your code.
Is your code for September still the same as before? If this is the case you should check with your payroll dept to see if they have a code change for you on a P6 that they have not applied. If they do not then you will need to get in touch with your tax office to sort it out.

alflavor

Thanks for replying. I have had a letter advising of a new code, I should now be on K227 however this hasn't yet reached Payroll (external company Ceridian)

I can't see K227 making much difference myself, what do you think.

CLAPTON

well change of K code is 280-227 = 53 corresponding to perhaps additional allowance of 530 at 40% tax for half year i.e. 557 x 40% /2 = £106

Pitlanepiglet

Yep and me....if you're a 40% tax payer you'll pay more in September and from now on :mad: They kept that bleeding quiet....I didn't expect to get a rebate but I didn't expect to pay more. OH was screwed by the 10% change as all of his income was in that band, he doesn't gain enough from the changes now for them to help.

Great just when I thought I was getting the ends to meet.....I could have cried this morning when I got my payslip.

jem16

Pitlanepiglet wrote: »

Yep and me....if you're a 40% tax payer you'll pay more in September and from now on :mad:

No you won't.

They kept that bleeding quiet....I didn't expect to get a rebate but I didn't expect to pay more.

Provided your code has been adjusted you will pay exactly the same tax.

For example someone on £45k.

Before September's change;

First £5435 tax free
Next £36,000 at 20% = £7200
Next £3565 at 40% = £1426

Total tax = £8626

After September

First £6035 tax free
Next £34,800 at 20% = £6960
Next £4165 at 40% = £1666

Total tax = £8626

So as a higher rate taxpayer you are no better nor worse off.

Pitlanepiglet

jem16 wrote: »

No you won't.



Provided your code has been adjusted you will pay exactly the same tax.

For example someone on £45k.

Before September's change;

First £5435 tax free
Next £36,000 at 20% = £7200
Next £3565 at 40% = £1426

Total tax = £8626

After September

First £6035 tax free
Next £34,800 at 20% = £6960
Next £4165 at 40% = £1666

Total tax = £8626

So as a higher rate taxpayer you are no better nor worse off.

I really hope you are right but it's not what both my payroll department and the tax office told me yesterday when I rang them to moan!

Your figures add up and TBH that was my initial understanding that the position for me would be neutral.

I'll dig the older tax codes out and raise the query again with payroll on Monday. Thanks very much for your response.

jem16

Pitlanepiglet wrote: »

I really hope you are right but it's not what both my payroll department and the tax office told me yesterday when I rang them to moan!

According to HMRC higher rate taxpayers should see no difference overall.


"Employees paying higher rate tax
The changes announced by the Chancellor are designed to benefit basic rate taxpayers only. Higher rate taxpayers still pay the same amount of tax overall as previously. This is because the increase in the Personal Allowance has been offset by a reduction in the threshold at which higher rate tax is payable."

Taken from

http://www.hmrc.gov.uk/employers/epa-basicrate.htm

Pitlanepiglet

Fab thanks, I'll email that over to them on Monday! Maybe we can eat this month after all!

Titewad

How did you get on Pitlanepiglet?
My Co have outsourced payroll this month to Ceridian (as in earlier post). They ballsed up my pay initially but have said the I will be worse off due to Sept tax changes (approx -£120pm). My Tax code changed from 464L to 468L.
With everything going up, I cannot afford for my pay to go down, little Timmy may not get an Xmas present
Are there any other calculators or facts that I can beat HR into submisison with?

dori2o

jem16 wrote: »

No you won't.



Provided your code has been adjusted you will pay exactly the same tax.

For example someone on £45k.

Before September's change;

First £5435 tax free
Next £36,000 at 20% = £7200
Next £3565 at 40% = £1426

Total tax = £8626

After September

First £6035 tax free
Next £34,800 at 20% = £6960
Next £4165 at 40% = £1666

Total tax = £8626

So as a higher rate taxpayer you are no better nor worse off.

This is only the case if the tax code that was operated in September (assuming it was on a cululative basis) is at least 600 allowances (60 digits to the code) higher than the code in operation in August (again assuming the code was being operated on a cumulatice basis)

As I have explained elsewhere, they have issued these codes at a time when P11d's are being processed and peoiples codes are changing because of the chenges to benefits, so if between your August salary, your code has changed twice (once toi give new allowance, and once to increase benefit details as per P11d), there is a chance that the difference between the 2 codes is less than the increase in allowances, and for 40% taxpayers that means paying extra tax in September if the code issued is on a cumulative basis.