Income tax confusion!

schizometric

Am I right in thinking that I can earn up to £6020 without being taxed if my tax code is 602? I have just started a new job and I'm currently not getting taxed (only NI). It'll take me about 4-5 months to earn that much, so does that mean I won't be taxed until that point?

Soo confused! I thought you had to pay tax throughout the whole period so I'm confused as to why I'm not. But then again I had a rebate last year for the amount of tax I would've paid up til that point.

Can someone with a brain explain please?

CLAPTON

have you worked between april and now ; if so how much have you earned

chrisbur

schizometric wrote: »

Am I right in thinking that I can earn up to £6020 without being taxed if my tax code is 602? I have just started a new job and I'm currently not getting taxed (only NI). It'll take me about 4-5 months to earn that much, so does that mean I won't be taxed until that point?

Soo confused! I thought you had to pay tax throughout the whole period so I'm confused as to why I'm not. But then again I had a rebate last year for the amount of tax I would've paid up til that point.

Can someone with a brain explain please?

If your tax code is 602 you can earn £6029 in a tax year and have no tax due. Provided that you are on a cumulative tax code (ie not a week1/month1 basis) then you get this allowance given a bit at a time through the year. So if you are paid monthly month 1 runs from April 6 to May 5 and you get an allowance of £502.42. Month 2 is from May 6 to June 5 and you get £1004.84, and so until you get to month 12 March 6 to April 5 when you get £6029.04.
If you have had no taxable income before starting this job and you have received your first pay in say month 7 (Oct 6 to Nov 7) then you have a tax allowance of £3516.94. As each month goes by your allowance goes up by £502.42 and your taxable gross by what you are paid. When you taxable gross is greater than your tax allowance for that month you start to pay tax. If you have had taxable income before starting this job then you have to add this in to your taxable gross.